No 3% GST when individuals sell gold jewellery to registered jewellers, says Arun Jaitley
Finance Minister Arun Jaitley on Thursday clarified that sale of old jewellery by an individual to a jeweller will not attract the provisions of Section 9(4) of the CGST Act, 2017.
- Jul 13, 2017,
- Updated Jul 13, 2017 7:54 PM IST
Finance Minister Arun Jaitley on Thursday clarified that sale of old jewellery by an individual to a jeweller will not attract the provisions of Section 9(4) of the CGST Act, 2017.
Therefore, the jeweller will not be liable to pay any tax under reverse charge mechanism (RCM) on such purchases, Jaitley tweeted.
However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under RCM will apply, Jaitley said.
Finance Minister's clarification comes a day after Revenue Secretary Hasmukh Adhia said that selling of old jewellery or bullion will attract a 3 per cent GST on the value realised.
"Supposing I am a jeweller. Somebody comes to me with old jewellery, it is as good as buying gold. You can later claim input tax credit," Adhia said at the GST Master Class.
Explaining further Adhia had said a jeweller buying old jewellery from someone will charge 3 per cent GST under reverse charge. So, if old jewellery worth Rs 1 lakh is sold, a GST of Rs 3,000 will be deducted.
If the proceeds from the old jewellery is used for buying new jewellery, the tax paid on sale will be adjusted against GST on the purchase, he said.
However, if an old jewellery is given to the jeweller for some modification, then it would be considered as job works and 5 per cent GST would be levied.
"But, if I am saying that take my old jewellery melt it and give me a new one, then it means that trader is a registered person and it is as good as buying gold in form of old jewellery," he said.
Under the GST regime rolled out from July 1, tax is levied at 3 per cent on gold, while any form of job work attract 5 per cent levy.
Finance Minister Arun Jaitley on Thursday clarified that sale of old jewellery by an individual to a jeweller will not attract the provisions of Section 9(4) of the CGST Act, 2017.
Therefore, the jeweller will not be liable to pay any tax under reverse charge mechanism (RCM) on such purchases, Jaitley tweeted.
However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under RCM will apply, Jaitley said.
Finance Minister's clarification comes a day after Revenue Secretary Hasmukh Adhia said that selling of old jewellery or bullion will attract a 3 per cent GST on the value realised.
"Supposing I am a jeweller. Somebody comes to me with old jewellery, it is as good as buying gold. You can later claim input tax credit," Adhia said at the GST Master Class.
Explaining further Adhia had said a jeweller buying old jewellery from someone will charge 3 per cent GST under reverse charge. So, if old jewellery worth Rs 1 lakh is sold, a GST of Rs 3,000 will be deducted.
If the proceeds from the old jewellery is used for buying new jewellery, the tax paid on sale will be adjusted against GST on the purchase, he said.
However, if an old jewellery is given to the jeweller for some modification, then it would be considered as job works and 5 per cent GST would be levied.
"But, if I am saying that take my old jewellery melt it and give me a new one, then it means that trader is a registered person and it is as good as buying gold in form of old jewellery," he said.
Under the GST regime rolled out from July 1, tax is levied at 3 per cent on gold, while any form of job work attract 5 per cent levy.