Sale of old jewellery, cars exempted from GST
Accordingly, the sale of old jewellery by an individual to a jeweller will not attract the provisions of Section 9(4) and jeweller will not be liable to pay tax under reverse charge mechanism
There would be GST on the sale of old jewellery and old vehicles the Revenue Department has clarified. GST would not apply to both old jewellery and vehicles as it is not furthering any business.
Clarifying on Revenue Secretary Hasmukh Adhia's comments yesterday, the department issued a press statement saying it was informed at GST Master Class on Wednesday that "purchase of old gold jewellery by a jeweller from a consumer will be subject to GST at the rate of 3 percent under reverse charge mechanism in terms of the provisions contained in Section 9(4) of the Central GST Act, 2017."
It then went on to state that the said section has to be read in conjunction with another section and "even though the sale of old gold by an individual is for a consideration, it cannot be said to be in the course or furtherance of his business (as selling old gold jewellery is not the business of the said individual), and hence does not qualify to be a supply per se."
"Accordingly, the sale of old jewellery by an individual to a jeweller will not attract the provisions of Section 9(4) and jeweller will not be liable to pay tax under reverse charge mechanism (RCM) on such purchases," it said.
Revenue department officials said the same principal will apply on sale of old cars or two-wheelers and no GST will be payable even though the supply would be for a consideration.
The statement said that Section 9(4) of the said Act mandates that tax on supply of taxable goods (gold in this case) by an unregistered supplier (an individual in this case) to a registered person (the jeweller in this case) will be paid by the registered person (the jeweller in this case) under reverse charge mechanism.
But
since
the
sale
is
not
in
consideration
for
the
furtherance
of
business
no
tax
will
apply.
It
however
said
the
tax
would
apply
if
an
unregistered
business
sells
gold
ornaments
to
registered
supplier.
"However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under RCM will apply," it added.
OneIndia News