No GST on sale of old gold jewellery, vehicles by individuals

A day after the government said that sale of old gold jewellery will attract 3 per cent Goods and Services Tax (GST) via the reverse charge mechanism, it clarified that sale of old gold jewellery as well as old vehicles by ‘individuals’ will not attract any GST.

However, if an unregistered supplier of gold ornaments sells it to a registered supplier, GST will be applicable under the reverse charge mechanism.

The government in an official statement said: “Even though the sale of old gold by an individual is for a 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 said individual), and hence does not qualify to be a supply per se”.

“Accordingly, the sale of old jewellery by an individual to a jeweller will not attract the provisions of Section 9(4) and jeweller will not be liable to pay tax under reverse charge mechanism (RCM) on such purchases,” it added.

Revenue department officials said the same principle will apply on sale of old cars or two-wheelers and no GST will be payable even though the supply would be for a consideration.

(Agencies)

 

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