AAR: GST to be paid solely on margin earned from resale of second-hand jewelry

Jewellers should pay GST solely on the revenue earned on resale of second-hand gold jewelry, Karnataka AAR has dominated.
The software to the Authority for Advance Ruling (AAR) was filed by Bengaluru-based Aadhya Gold Private Ltd looking for readability on whether or not GST is to be paid solely on the distinction between the promoting and buy value if it purchases used/second- hand gold jewelry from people and there’s no change within the kind/nature of products on the time of sale.
The Karnataka bench of the AAR noticed that GST is payable solely on the margin between the sale value and the acquisition value, for the reason that applicant was not melting the jewelry to rework it to bullion after which recreating it into new jewelry, however quite cleansing and sharpening the outdated jewelry with out altering the type of the jewelry bought.
Experts stated this ruling will cut back the GST payable on resale of second-hand jewelry. Currently, the trade normally prices GST at three per cent charge on the gross sale worth acquired from the purchaser.

AMRG & Associates Senior Partner Rajat Mohan stated most jewellers procure outdated jewelry from frequent man/unregistered sellers, obliviating the necessity for credit score of taxes within the palms of jewellers.
“The Karnataka AAR’s decision to charge GST only on the difference between the purchase price and the selling price will have a significant impact on the industry to lower the tax cost to the final consumer,” Mohan added.
With inputs from PTI