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TMI Blog2023 (5) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... of gold, which is a taxable supply and hence the first condition is satisfied. Classification of gold jewellery and gold lumps - HELD THAT:- The tariff heading 7113 pertains to jewellery and parts thereof of precious metal which includes gold jewellery, and tariff heading 7108 pertains to gold in unwrought or semi-manufactured forms such as gold lumps or irregular shapes of gold. Gold jewellery are a distinct category of article having distinct characteristics and is not same as gold lumps. When the applicant melts the gold jewellery into gold lumps, the nature of goods changes in as much as the characteristics of the articles and the classification changes. Since the processing done by the applicant changes the nature of goods, they are not eligible to avail the benefits of Rule 32(5) of CGST Rules, 2017. The HSN Code for Old Gold Jewellery is 7113 and after melting into gold lumps or irregular shapes of gold the HSN Code is 7108. - DR. M.P.RAVI PRASAD AND SRI. KIRAN REDDY T, MEMBER Represented by : Sri V. Sudhindranath, Advocate ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 AND UNDER SECTION 98(4) OF THE KGST ACT, 2017 M/s. White Gold Bullion Privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2017- Central Tax (Rate) dated 28-06-2017 and pays the GST on outward supplies as per Rule 32(5) as stipulated in this Notification. The applicant does not take any input on these purchases. 5.3 The applicant states that the Rule 32(5) of the CGST Rules, 2017 provides for the valuation of taxable supply by a person dealing in buying and selling of second-hand goods. Extract of Rule 32 (5) is being produced below, which states that- (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 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 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, is shall be ignored. Provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewellery which is sold by them after charging GST. The applicants work ends at melting and nothing beyond that. The applicant is not doing any further process on these melted lumps and is selling it as it is. The applicant is invoicing these supplies to the other person as Second hand Ornaments . 6.3 The applicant further states that the purpose of the Margin scheme, stipulated under Rule 32(5) of the CGST Rules, 2017 is to avoid double taxation of the goods. Once the goods have borne the incidence of tax, the tax should not be re-applied on the same component when it re-enters the economic supply chain. The applicant also refers to Notification No. 10/2017- Central Tax (Rate) dated 28-06-2017 wherein the Central Government, on being satisfied that it is necessary in the public interest to do so, exempted intra-state supplies of second hand goods received by a registered person dealing in second hand goods and paying GST as per Rule 32(5) from a supplier who is not registered. The very purpose of this notification was to maintain the purpose of GST for which it has been bought i.e. No Cascading effect, Taxing at destination. 6.4 The applicant has relied on the judgement of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between the date or purchase and the date of disposal by the person making such repossession. 10.2 The above rule stipulates the method by which the value of supply of second hand goods is arrived and is applicable onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 113 11 20 Jewellery studded with gems 7113 11 30 Other articles of Jewellery 7113 11 90 Parts 7113 19 Of other precious metal, whether or not plated or clad with precious metal : 7113 19 10 Of gold, unstudded 7113 19 20 Of gold, set with pearls 7113 19 30 Of gold, set with diamonds 7113 19 40 Of gold, set with other precious and semiprecious stones 7113 19 50 Of platinum, unstudded 7113 19 60 Parts 7113 19 90 Other 7113 20 00 Of base metal clad with precious meta 11.3. Tariff heading 7108 covers 'Gold (Including Gold Plated with Platinum) Unwrought Or In Semi-Manufactured Forms, Or In Powder Form' as under: TARIFF ITEM DESCRIPTION OF GOODS ..... X X X X Extracts X X X X X X X X Extracts X X X X
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