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TMI Blog2021 (7) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... er the GST Act as it is covered under entry no.13 of Schedule V to the Notification No.01/2017-Central Tax (Rate) dated 28th June, 2017 which is taxable at 1.5% under the CGST Act and similarly taxable under the KGST Act, 2017 also at 1.5%. Hence, the supplier satisfies the condition that the supply made by him must be a taxable supply. The next condition is the supplier must be a person dealing in buying and selling of second-hand goods. It is seen that the applicant has admitted that he is purchasing used gold jewellery from individuals and selling the same, after cleaning and polishing them. The applicant has also admitted that he is not availing any input tax credit on the purchase of such goods and the goods so purchased are supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Goods and Services Tax Act, 2017 as well as Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act and KGST/SGST Act respectively) engaged in the business of buying and selling of second hand gold jewellery. 3. The applicant has sought advance ruling in respect of the following question: a. Whether GST is to be paid only on the difference between the selling price and purchase price as stipulated under Rule 32(5) of CGST Rules, 2017, if applicant purchases used/ second hand gold jewellery from individuals who are not dealers under the GST and at the time of sale there is no change in the form / nature of goods? 4. Admissibility of the application: The question is about determination of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicable on such transaction. The relevant portion of Rule 32(5) of the CGST Act, 2017 is reproduced below: 5) Where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored: Provided that the purchase value of goods repossessed from a defaulting borrower, who is not registered, for the purpose of recovery of a loan or debt shall be deemed to be the purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of second hand goods : applicant states that in the backdrop of the above facts, it is obvious that they are in the business of buying and selling of second hand goods . The fact that the ornaments are originally purchased from common man, being unregistered persons and not from registered dealer/ shops is itself proof that the goods purchased are used / second hand goods in nature. Second hand goods are goods which are not new and which are pre-owned by someone else. The said goods are pre-owned and pre-used by the unregistered persons before selling it to the Applicant. 6.2 Since all the conditions laid down under Rule 32(5) of the CGST Rules, 2017 are satisfied by the Applicant, the Applicant is of the opinion that margin scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32. Determination of value in respect of certain supplies.- (1) Notwithstanding anything contained in the provisions of this Chapter, the value in respect of supplies specified below shall, at the option of the supplier, be determined in the manner provided hereinafter. (2) . (3) . (4) . (5) Where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used good as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd-hand goods. It is seen that the applicant has admitted that he is purchasing used gold jewellery from individuals and selling the same, after cleaning and polishing them. The applicant has also admitted that he is not availing any input tax credit on the purchase of such goods and the goods so purchased are supplied as such . The applicant has stated that he is not melting the jewellery to convert it into bullion and then remaking it to new jewellery but only cleaning the old jewelry and polishing it without changing the nature and form of the jewellery so purchased. These goods are then supplied to other persons. Further, the applicant admits that they are invoicing the goods as used gold ornaments . Hence, the applicant satisfies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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