9911796707
TMI Blog2022 (3) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... classifiable under Heading 9701 and the applicant is liable to pay GST of 12%. Old Cars - HELD THAT:- Motor Vehicles fall under Heading 8703 of the GST Tariff. All the items under 8703 will attract 28% GST except Tariff item 870310 10; Sub-heading 8703 80. However old cars will attract a lower rate of tax as per Notification No. 08/2018 CT (Rate) dated 25.01.2018. As per the said Notification, the lesser rate of tax i.e. 18 % is applicable to old cars provided the conditions mentioned therein are fulfilled. Old Jewellery - HELD THAT:- Articles of jewellery and parts thereof, of precious metal will fall under Heading 7113 of the GST Tariff attracting 3% GST. Antique jewellery - HELD THAT:- Antique jewellery of age exceeding 100 years:- Antique jewellery of age exceeding 100 years will fall under Tariff item 9706 00 00 and will be liable to tax @ 12% GST. Old Watches - HELD THAT:- Wrist watches, pocket-watches and other watches, including stopwatches, with case of precious metal or of metal clad with precious metal will fall under CH 9101 of the GST Tariff and Wrist watches, pocket-watches and other watches, including stop-watches, other than those of Heading 9101 will fall under He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een sale price and purchase price considering Jewellery as second hand goods as provided under Rule 32(5) of CGST Rules Watches: Old Watches HSN- 9101/9102 Tax Rate- 18% on value 12% on difference between sale price and purchase price considering watches as second hand goods as provided under Rule 32(5) of CGST Rules Antique Watches of an age exceeding one hundred years HSN-9706 Tax Rate- 12% on value 12% on difference between sale price and purchase price considering watches as second hand goods as provided under Rule 32(5) of CGST Rules Books: Antique Books HSN-9706 Tax Rate- 12% on value 12% on difference between sale price and purchase price considering Antique Books as second hand goods as provided under Rule 32(5) of CGST Rules (ii) Whether Applicant dealing in second hand goods is required to pay tax on the difference between selling price and purchase price as stipulated in Rule 32(5) of CGST Rules, 2017? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stwhile business entity was dealing: namely:- * Paintings procured from individual art collectors, artists or other art dealers, * Old jewellery, cars, watches, etc. including vintage cars, * Memorabilia/Collectibles such as clothing, sport equipment, spectacles, accessories, autographs of celebrities and renowned personalities and * Antique consisting mainly of antique books, jewellery, watches and other articles. 2.4 Appellant will predominantly be dealing in personal effects (second hand or used goods) which are procured or bought from users or collectors. The entire business operations (including the rights and obligations under all contracts) of erstwhile business entity will be transferred to applicant on transfer of business. 2.5 In view of Section 103 of CGST Act, 2017, applicant feels that advance ruling order (duly modified by AAAR) obtained by erstwhile business entity may not be applicable / binding on it as both the entities are two different legal entities having separate GST registrations. Hence, applicant has filed the present application seeking ruling on the same queries (except few on which AAR as well as AAAR did not answer) decided by the Honorable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed 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. 2.11 Rule 32(5) of CGST Rules applies to the "Second hand goods" or "used goods" The terms "Second hand goods" or "Used goods" are not defined in the CGST Act/Rules and even the General Clauses Act. As per the dictionary meaning or common parlance meaning, "second hand goods" and "used goods" as per various dictionaries are as under: Second Hand Goods:- i. Second-hand things are not new and have been owned by someone else (Collins Dictionary) ii. having had a previous owner; not new (English Oxford Dictionary) iii. not new; having been used in the past by someone else (Cambridge English Dictionary) iv. acquired after being used by another (Merriam Webster) v. previously used or owned (Dictionary.com) Used Goods:- i. already owned or put to a purpose by someone else; not new (Cambridge Dictionary) ii. that has endured use (Merriam Webster) 2.12 Applicant gets second hand/used goods from individual collector or users. All goods listed in table given in "Issues for Deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . difference between selling price and purchase price) as provided in Rule 32(5) of CGST Rules and can discharge its GST liability on such margin. 2.17 In view of what is stated above, Applicant submits that the impugned goods should be valued at difference between the sale price and the purchase price. GST should be charged at applicable rate on such difference only and not on sale value/transaction value of such goods. Historical Background of the entity whose business is being taken over by the Applicant: 2.18 Erstwhile business entity had filed an advance ruling application in October 2018 with MAAR for: * Ascertaining the classification of goods dealt by them; and for * >Applicability of Rule 32(5) of CGST Rules (valuation mechanism for second hand goods] for valuing the goods dealt by them. The MAAR passed order no. GST-ARA 86/2018-19/8-7 dated 15.01.2019 specifying the classification, valuation and applicable GST rates on goods dealt by erstwhile Business entity. Said order of MAAR was partially in favor of erstwhile Business entity. The said order was unfavorable on issue of applicability of Rule 32(5) to some of the goods dealt with by erstwhile Business entity. Ers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s HSN-9706 Tax Rate- 12% on value 12% on difference between sale price and purchase price considering Jewellery as second hand goods as provided under Rule 32(5) of CGST Rules Watches: Old Watches HSN- 9101/9102 Tax Rate- 18% on value 12% on difference between sale price and purchase price considering watches as second hand goods as provided under Rule 32(5) of CGST Rules Antique Watches of an age exceeding one hundred years HSN-9706 Tax Rate- 12% on value 12% on difference between sale price and purchase price considering watches as second hand goods as provided under Rule 32(5) of CGST Rules Books: Antique Books HSN-9706 Tax Rate- 12% on value 12% on difference between sale price and purchase price considering Antique Books as second hand goods as provided under Rule 32(5) of CGST Rules 04. HEARING 4.1 preliminary hearing was held on 20.08.2021. Authorized representatives of the Applicant, Shri. Naresh Sheth, CA, Shri. Jinesh Shah, CA and Shri. Siddhanth Shetty, employee of company were Present. The Jurisdictional officer Shri. Mangesh Deshmukh, STO, MUM-VAT-C-602, Mumbai was also present. The Authorized representative made oral submission with respect to admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of tax as per Notification No. 08/2018 CT (Rate) dated 25.01.2018. As per the said Notification, the lesser rate of tax i.e. 18 % is applicable to old cars provided the conditions mentioned therein are fulfilled. Also, provisions of Rule 32(5) of CGST Rules to be applicable, subject to the conditions of the Notification No. 08/2018 CT (Rate) dated 25.01.2018 being satisfied. (iii) Old Jewellery:- Articles of jewellery and parts thereof will fall under Heading 7113 of the GST tariff attracting rate applicable to HSN. The provisions of Rule 32(5) of CGST Rules will be applicable to applicant in respect of old jewellery which are purchased by them and then sold. (iv) Antique jewellery of age exceeding 100 years:- Antique jewellery of age exceeding 100 years will fall under Tariff item 9706 00 00 and will be liable to tax @ 12% GST. The provisions of Rule 32(5) of CGST Rules will not be applicable to the applicant in this case. (v) Old watches:- Wrist watches, pocket-watches and other watches, including stop-watches, with case of precious metal or of metal clad with precious metal will fall under CH 9101 of the GST Tariff and Wrist watches, pocket-watches and other watches, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hallenged the decision which disallowed to them the benefit of Rule 32(5) of the CGST Rules, 2017 and that the applicant was required to pay tax @ 12% on the sale value of such goods. 5.4.3 The Appellate Authority observed that, they had to only decide the limited issue of the applicability of Rule 32(5) of the CGST Rules, 2017. 5.4.4 The Appellate Authority held that SAPL (Astaguru.com) was eligible to take the benefit of Rule 32(5) for the said products, viz. Paintings bought from individual art collectors, Antique Watches, Antique Jewellery and Antique Books. 5.5 The said entity SAPL (Astaguru.com) is being taken over by the applicant as a going concern and since the applicant will be dealing in the same goods as were being dealt with by SAPL (Astaguru.com), we are of the opinion that the earlier decisions of this Authority and the Maharashtra Appellate Advance Ruling Authority together, will be applicable in the instant case. 06. In view of the above discussions, we pass an order as follows: ORDER (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA- 40/2020-21/B-27, Mumbai, dt. 08/03/2022 F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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