Second-hand jewellery: Jewellers to pay GST only on profit earned
GST is payable only on the margin between the selling price and purchasing price. This ruling would reduce the GST on resale of second-hand jewellery
The Karnataka bench of the Authority for Advance Ruling (AAR) has ruled that jewellers will have to pay GST only on profits earned on sale of second-hand gold jewellery. The application was filed by the Bengaluru based Aadhya Gold Private Ltd seeking clarity on whether GST should be paid only on the difference between the selling and buying price if the second hand jewellery is purchased from individuals and there is no change in nature or form of goods at the time of sale.
GST is payable only on the margin between the selling price and purchasing price as the applicant was not melting the jewellery to convert it into a bullion and then recreating into a new jewellery, but rather cleaning and polishing the old jewellery without changing the form of the jewellery purchased, the bench noted.
Lower taxes
Tax costs would also be lowered to the final customer as the decision to charge GST only on the difference between purchasing and selling price will have a significant impact on the industry.
Download Money9 App for the latest updates on Personal Finance.
