Big relief! GST to be paid only on margin earned on resale of old jewellery: AAR
Karnataka AAR has ruled that jewelers will have to pay GST only on profit earned on resale of old gold jewellery. The application to the Authority for Advance Ruling (AAR) was filed by Bengaluru-based Aadhya Gold Pvt Ltd, seeking to clarify whether GST is to be paid only on the difference between the sale and purchase price if it Buys used / used gold jewelery from individuals and there is no change in the form / appearance of goods at the time of sale
The Karnataka Bench of AAR observed that GST is payable only on the difference between the sale price and the purchase price, as the applicant was not melting the jewelery to convert it into bullion and then converting it into new jewellery, but by cleaning and polishing it. Had been. Old jewelery without changing the look of the jewelery purchased.
Experts say that this decision will reduce the GST on resale of second hand jewellery. At present, the industry generally charges GST at the rate of three per cent on the gross selling price received from the buyer.
AMRG & Associates Senior Partner Rajat Mohan said that most of the jewelers buy old jewelery from common man/unregistered dealers once the tax credit requirement is eliminated in the hands of jewellers.
“The decision to levy GST of Karnataka AAR only on the difference between the purchase price and the selling price will have a significant impact on the industry to reduce the tax cost for the end consumer,” Mohan said.
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