GST will not be Applicable on Old Jewelry and Vehicles

GST_NEWS (1) Insightsuccess

The government of India has redefined the tax policies in India and has introduced only one taxation system on goods purchase all over the nation, named as Goods and Service Tax (GST), while eliminating other state taxes. Like a coin has two sides, everything comes with a good and bad side. Similarly, GST has some positive as well as negative sides. The Income and Taxation Department of India has recently clarified the doubts of citizens of the country that GST will not apply to the sale and purchase of old vehicles and jewelry as it will not carry forward the business further.

The press statement released by the Income Tax Department clearly stated that the purchase of old gold jewelry by a jeweler from a consumer would be subject to GST at the rate of three percent under reverse charge mechanism on the provisions as mentioned in Section 9(4) of the Central GST Act, 2017.

Industry specialists said that the statement should be read along with another section which stated, “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 jewelry is not the business of the said individual), and hence does not qualify to be a supply per se.” The statement further informed that the sale of an old jewelry by any person to a jeweler would not attract the provisions of Section 9(4) and even the jeweler won’t have to to pay tax under reverse charge mechanism (RCM) on any of such purchases.

The Revenue Department clearly explained that the same rules would apply to the sale of old vehicles too, including both cars or two-wheelers. It has even mentioned that GST will not be implemented even though the supply would be taken into consideration. This consideration has been taken by the government as the selling of neither old jewelry nor vehicle takes the business forward, but the statement has apparently stated that if any unregistered company sells ornaments to a registered supplier, then the tax will inevitably apply.