Goods and Services Tax (GST) will have to be paid only for profit on resale of old or second hand gold jewellery. This arrangement has been given by the Authority of Advance Ruling (AAR) of Karnataka. Aadya Gold Pvt Ltd, based in Bengaluru, the capital of Karnataka, had filed an application in the AAR. In this application, she had sought information that if she buys old or second hand gold jewelery from any person and there is no change in the form or nature of that product at the time of sale, then what is the difference between the GST purchase and sale price? But will it be payable?
The Karnataka Bench of AAR, after hearing the application, ruled that GST would be payable only on the margin of sale price and purchase price, as the jewelery is not being melted down and converted into bullion by the applicant and later it has to be converted into new jewellery. is not being given. 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.
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