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Tuesday , 21 November 2017
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Jewellers not to pay tax on old jewellery buys from individuals

New Delhi, July 13 (IANS) The government on Friday clarified that jewellers will not need to pay the Goods and Services Tax (GST) under reverse charge mechanism on old jewellery purchases from individuals.

“Even though the sale of old gold by an individual is for a tax consideration, it cannot be said to be in the course or furtherance of his business, as selling old gold jewellery is not the business of the individual and hence does not qualify to be a supply in itself,” the Finance Ministry said in a statement.

The clarification came after Revenue Secretary Hasmukh Adhia on Thursday said that purchase of old gold jewellery by a jeweller from a consumer would be subjected to three per cent GST under reverse charge mechanism in terms of the provisions contained in the Central GST Act.

However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under reverse charge mechanism will apply.

Section 9(4) of the said CSGT Act mandates that tax on supply of taxable goods (gold in this case) by an unregistered supplier (an individual in this case) to a registered person (the jeweller in this case) will be paid by the registered person (the jeweller in this case) under reverse charge mechanism.

This provision, however, has to be read in conjunction with Section 2(105) read with Section 7 of the said Act. Section 2 (105) defines supplier as a person supplying the goods or services and Section 7 provides that a supply is a transaction for a consideration by a person in the course or furtherance of business.

–IANS
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Post Source: Ians feed

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