Friday, August 19, 2022
HomeFinanceBig Update! GST will have to be paid on the profit of...

Big Update! GST will have to be paid on the profit of sale of old jewelery

Jewelers will have to pay Goods and Services Tax (GST) only for profits made on resale of second hand or used gold jewellery. Advance Decision Authority (AAR), Karnataka has given this arrangement. Bengaluru-based Aadya Gold Pvt Ltd had filed an application in the AAR seeking information that if it buys second hand or second hand gold jewelery from any person and there is no change in the form or nature of the product at the time of sale, what will happen? GST will have to be paid on the difference between the purchase and sale price.



The Karnataka Bench of AAR concluded that the GST would be payable only on the margin of sale price and purchase price, as the jewelery is not being melted down into bullion by the applicant and subsequently new jewelery is not being made. Rather the applicant is cleaning and polishing the old jewelery and not making any changes in its appearance.

Experts say that this decision will reduce the GST payable on resale of second-hand jewellery. At present the industry charges GST equal to three per cent of the gross selling price received from the buyer. Rajat Mohan, Senior Partner, AMRG & Associates said, “Most jewelers buy used jewelery from the general public or from unregistered dealers. This eliminates the need to credit the tax in the hands of jewellers.”



Mohan said, “Karnataka AAR regime has provided that GST will be payable only on the difference between the purchase price and the selling price. This will have a significant impact on the industry and ultimately The cost of tax for the consumer will come down.”

Parvesh Maurya
Parvesh Maurya
Parvesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @ praveshmaurya24@gmail.com
RELATED ARTICLES
- Advertisment -

Most Popular

Recent Comments