TaxTMI 
TaxTMI 
2020 (4) TMI 690
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.... of CGST Rules, 2017 if dealer purchases used / second hand gold jewellery from individuals who are not dealers under the GST and at the time of sale there is no change in the form/ nature of goods? b) Whether ITC is allowed to be claimed if purchases are made from the dealer from whom marginal scheme if applicable? 3. The applicant furnishes some facts relevant to the stated activity: a. The applicant states that he is in the business of sale of used (second-hand goods). He states that he is purchasing used gold jewellery from unregistered persons and selling the same to others. b. The applicant states that as per Rule 32(5) of the CGST Rules, 2017, if a person engaged in supply of second hand goods, he can avail the benefit of marginal scheme as per Notification No. 10/2017- Central Tax (Rate) dated 28.06.2017 under GST provided that he shall satisfy all the conditions prescribed in the above said rule. c. The applicant states that Rule 32(5) of the CGST Rules, 2017 provides valuation for taxable supply by a person dealing in buying and selling of second-hand goods. In such case, value of supply shall be the difference between selling price ....
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....ter such minor processing which does not change the nature of goods and where no input tax has been availed on purchase of such goods. i. Second hand things are not new and have been owned by some one else (Collins Dictionary) ii. Having had a previous owner; not new (English Oxford Dictionary) Rule 32(5) of CGST Rules clearly and unambiguously applies to person dealing in second hand goods. As states in facts of the case, applicant is dealing in old jewellery. i. The applicant states that it is settled jurisprudence principle that when the words of a statute is clear, plain and unambiguous, i.e. they are reasonable susceptible to only one meaning, the courts are bound to give effect to that meaning inespective of consequences. Moreover, if the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. This rule of interpretation is followed in plethora of judgements. A few of the judgements are as under: i. Nelson Motisv. Union of India (AIR 1992 SC 1981) = 1992 (9) TMI 355 - SUPREME COURT ii. Gurudevantt VKSSS Maryadit v. State ....
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.... 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 on such purchases. However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under RCM will apply". c. The learned representative stated that the applicant is presently paying taxes on the entire value without availing marginal scheme, but intends to avail the benefit of marginal scheme and hence applied. He stated that the applicant has advertised himself in media that he is purchasing old used jewellery and since he is selling the same as it is, i.e. after cleaning and polishing, without changing the nature of the ornament, he would be dealing only in second hand goods and hence not a dealer in first hand goods and hence would be eligible to utilise the benefit of marginal scheme for valuation of supply. FINDINGS & DISCUSSION: 5. At the outset we would like to make it clear that the provisions of CGST, Act 2017 and SGST, Act 2017 are in pari materia and have the same prov....
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.... (ii) where no input tax credit has been availed on the purchase of such goods. 6.3 In the instant case, the supplier, i.e. the applicant is effecting the supply of second-hand jewellery which is taxable under the GST Act as it is covered under entry no. 13 of Schedule V to the Notification No. 01/2017-Central Tax (Rate) dated 28th June, 2017 which is taxable at 1.5% under the CGST Act and similarly taxable under the KGST Act, 2017 also at 1.5%. Hence the supplier satisfies the condition that the supply made by him must be a taxable supply. 6.4 Regarding the next condition, the supplier must be a person dealing in buying and selling of second-hand goods. It is seen that the applicant has admitted that he is purchasing used gold jewellery from individuals and selling the same, after cleaning and polishing them. He must not avail any input tax credit on the purchase of such goods. The goods so purchased must be supplied as such and if at all any process is involved, that must not change the nature of the product. The applicant has stated that he is not melting the jewellery to convert it into bullion and then remaking it to new jewellery but only cleaning the old jeweller....