Applicant buying and selling second hand gold jewellery cannot pay GST on Differential Amount

The Karnataka Authority for Advance Ruling(AAR Karnataka) has ruled out in the matter of M/s. White Gold Bullion Private Limited that Applicant buying and selling second hand gold jewellery cannot pay GST on Differential Amount.

The applicant is a Private Limited Company registered under the provisions of Central Goods and Services Tax Act, 2017 as well as Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act and KGST / SGST Act respectively). The applicant is engaged in the business of purchase and sale of used gold (Second hand goods).

The Questions and Ruling are as follows:

i. Whether the applicant purchasing second hand gold in the form of jewellery/ parts of jewellery, from unregistered individuals and sells to registered/ unregistered dealers, after melting the same, in the form of lumps/ irregular shapes of gold, without changing the nature, (i.e.,) Gold remains gold, has to pay GST on the margin difference between the sale price and purchase price as stipulated in Rule 32(5) of CGST Rules, 2017?

ii. Whether the HSN Code for Old Gold Jewellery purchased and after melting the purchased old gold jewellery is 7113?

RULING

i. The applicant purchasing second hand gold in the form of jewellery/ parts of jewellery, from unregistered individuals and selling to registered/ unregistered dealers, after melting the same, in the form of lumps I irregular shapes of gold, cannot pay GST on the margin difference between the sale price and purchase price as stipulated in Rule 32(5) of CGST Rules, 201 7.

ii. 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.

For Official Ruling Download PDF Given Below: