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  Business   Economy  13 Jul 2017  No GST on sale of old jewellery, cars by individuals

No GST on sale of old jewellery, cars by individuals

PTI
Published : Jul 13, 2017, 8:26 pm IST
Updated : Jul 13, 2017, 8:26 pm IST

However, if an unregistered supplier of gold ornaments sells old jewellery to a registered supplier, it will attract GST.

Revenue Department clarified that sale of old jewellery as well as old vehicles by individuals will not attract any GST. (Representational Image)
 Revenue Department clarified that sale of old jewellery as well as old vehicles by individuals will not attract any GST. (Representational Image)

New Delhi: The Revenue Department on Thursday clarified that sale of old jewellery as well as old vehicles by individuals will not attract any GST as the sale is not for 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 yesterday that "purchase of old gold jewellery by a jeweller from a consumer will be subject to GST at the rate of 3 per cent 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. 

A supplier is defined as the one who buys or sells in furtherance of his business.

Tags: gst, jewellery, vehicles, hasmukh adhia
Location: India, Maharashtra, Mumbai (Bombay)