TaxTMI 
TaxTMI 
2021 (7) TMI 548
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....ng under Section 97 of CGST Act, 2017 read with Rule 104 of CGST Rules, 2017 and Section 97 of KGST Act, 2017 read with Rule 104 of KGST Rules, 2017, in form GST ARA-01 discharging the fee of Rs. 5,000/- each under the CGST Act and the KGST Act. 2. 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) engaged in the business of buying and selling of second hand gold jewellery. 3. The applicant has sought advance ruling in respect of the following question: a. Whether GST is to be paid only on the difference between the selling price and purchase pri....
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....and hence there is no input tax credit available in the hands of the Applicant. 5.5 The Applicant states that as per Rule 32(5) of the CGST Rules, 2017, the value of supply shall be the difference between selling price and purchase price. Further, if the said difference is negative, then GST is not applicable on such transaction. The relevant portion of Rule 32(5) of the CGST Act, 2017 is reproduced below: "5) Where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the....
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.... second hand ornaments to the buyer. However, the said process does not alter the nature or form of the jewellery. In other words, the nature and form of goods remain the same at the time of purchase and sale in the hands of the Applicant. 6.1.3 Buying and selling of 'second hand goods': applicant states that in the backdrop of the above facts, it is obvious that they are in the business of buying and selling of 'second hand goods'. The fact that the ornaments are originally purchased from common man, being unregistered persons and not from registered dealer/ shops is itself proof that the goods purchased are used / second hand goods in nature. Second hand goods are goods which are not new and which are pre-owned by someone else. The said....
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....ssues that needs to be addressed is related to whether the applicant is eligible to utilize the sub-rule (5) of rule 32 of Central Goods and Services Tax Rules, 2017. 9.1 Rule 32 of the CGST Rules, 2017 reads as under: "Rule 32. Determination of value in respect of certain supplies.- (1) Notwithstanding anything contained in the provisions of this Chapter, the value in respect of supplies specified below shall, at the option of the supplier, be determined in the manner provided hereinafter. (2)................... (3)................... (4)................... (5) Where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used good as such or after such minor processing which does not ....
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....ST Act, 2017 also at 1.5%. Hence, the supplier satisfies the condition that the supply made by him must be a taxable supply. 9.4 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. The applicant has also admitted that he is not availing any input tax credit on the purchase of such goods and the goods so purchased are supplied 'as such'. 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 jewelry and polishing it without chang....