TaxTMI 
TaxTMI 
2022 (3) TMI 572
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....e price and purchase price considering painting as second hand goods as provided under Rule 32(5) of CGST Rules Cars Old Cars HSN-8703 Tax Rate- 18% on value 18% on difference between sale price and purchase price considering car as second hand goods as provided under Rule 32(5) of CGST Rules and also Notification No. 08/2018 dated 25.01.2018 Jewellery: Old Jewellery: HSN-7113 Tax Rate- 3% on value 3% on difference between sale price and purchase price considering Jewellery as second hand goods as provided under Rule 32(5) of CGST Rules Antique Jewellery of an age exceeding one hundred years HSN-9706 Tax Rate- 12% on value 12% on difference between sale price and purchase price considering Jewellery as second hand goods as provided under Rule 32(5) of CGST Rules Watches: Old Watches HSN- 9101/9102 Tax Rate- 18% on value 12% on difference between sale price and purchase price considering watches as second hand goods as provided under Rule 32(5) of CGST Rules Antique Watches of an age exceeding one hundred years HSN-9706 Tax Rate- 12% on value 12% on difference between sale price and purchase price considering watches as second hand goods as provided under Rule 32(5....
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.... quality and authenticity of the goods, Applicant will upload the details of goods for online auction. (iii) Goods will remain in Applicant's possession during the agreed period of approval. (iv) Applicant will have a right to retain or return the goods during the approval period. After conveying the approval and confirming purchase of goods, Applicant will sell the goods to buyer (highest bidder) in auction and will issue the sale invoice to the buyer. (v) The ownership of auctioned goods will be transferred from applicant to buyer the sale invoice is issued to buyer by the Applicant. 2.3 Applicant will continue to deal in the goods in which erstwhile business entity was dealing: namely:- * Paintings procured from individual art collectors, artists or other art dealers, * Old jewellery, cars, watches, etc. including vintage cars, * Memorabilia/Collectibles such as clothing, sport equipment, spectacles, accessories, autographs of celebrities and renowned personalities and * Antique consisting mainly of antique books, jewellery, watches and other articles. 2.4 Appellant will predominantly be dealing in personal effects (second hand or used goods) which are pro....
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.....9 Applicant, relies on ruling pronounced by MAAR and MAAAR respectively in case of erstwhile business entity wherein the authorities have concurred to above referred classification of goods and applicable tax rates in respect of goods dealt with by Astaguru.com. B. Submissions with respect to valuation of goods: 2.10 Section 15 of CGST Act prescribes for value of taxable supply. Rule 32(5) of CGST Rules provides that 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 selling price and the purchase price and where the value of such supply is negative, it shall be ignored. 2.11 Rule 32(5) of CGST Rules applies to the "Second hand goods" or "used goods" The terms "Second hand goods" or "Used goods" are not defined in the CGST Act/Rules and even the General Clauses Act. As per the dictionary meaning or common parlance meaning, "second hand goods" and "used goods" as per various dictionaries are as under: ....
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....s need for such provision. 2.15 Once the goods are second hand or used goods, Rule 32(5) is applicable irrespective of value of such goods and irrespective of nature of such goods. There is no stipulation in the Rule that the goods whose value increases with passage of time is not 'used or second hand goods'. It is a settled jurisprudence that tax authorities cannot read any word or phrase into the legal provisions. 2.16 Applicant, relies on ruling pronounced by MAAR and MAAAR respectively in case of erstwhile business entity wherein the authorities have held that erstwhile business entity is entitled to value majority of its goods at margin (i.e. difference between selling price and purchase price) as provided in Rule 32(5) of CGST Rules and can discharge its GST liability on such margin. 2.17 In view of what is stated above, Applicant submits that the impugned goods should be valued at difference between the sale price and the purchase price. GST should be charged at applicable rate on such difference only and not on sale value/transaction value of such goods. Historical Background of the entity whose business is being taken over by the Applicant: 2.18 Erstwhile busi....
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....9701 Tax Rate- 12% on value 12% on difference between sale price and purchase price considering painting as second hand goods as provided under Rule 32(5) of CGST Rules Cars Old Cars HSN-8703 Tax Rate- 18% on value 18% on difference between sale price and purchase price considering car as second hand goods as provided under Rule 32(5) of CGST Rules and also Notification No. 08/2018 dated 25.01.2018 Jewellery: Old Jewellery: HSN-7113 Tax Rate- 3% on value 3% on difference between sale price and purchase price considering Jewellery as second hand goods as provided under Rule 32(5) of CGST Rules Antique Jewellery of an age exceeding one hundred years HSN-9706 Tax Rate- 12% on value 12% on difference between sale price and purchase price considering Jewellery as second hand goods as provided under Rule 32(5) of CGST Rules Watches: Old Watches HSN- 9101/9102 Tax Rate- 18% on value 12% on difference between sale price and purchase price considering watches as second hand goods as provided under Rule 32(5) of CGST Rules Antique Watches of an age exceeding one hundred years HSN-9706 Tax Rate- 12% on value 12% on difference between sale price and purchase price considerin....
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....ne hundred years). (e) Antique Books. 5.4.1 Earlier, SAPL (Astaguru.com) had also applied for a ruling in respect of determination of classification, valuation and GST rates applicable to the goods mentioned in para 5.3 above, which was decided by this Authority vide Order GST-ARA 86/2018-19/B-7 dated 15.01.2019 wherein it was held as under:- (i) Paintings to be classifiable under Heading 9701 and the applicant to pay GST of 12% on the sale value. (ii) Old Cars:- Motor Vehicles fall under Heading 8703 of the GST Tariff. All the items under 8703 to attract 28% GST except Tariff item 870310 10; Sub-heading 8703 80. However old cars to attract a lower rate of tax as per Notification No. 08/2018 CT (Rate) dated 25.01.2018. As per the said Notification, the lesser rate of tax i.e. 18 % is applicable to old cars provided the conditions mentioned therein are fulfilled. Also, provisions of Rule 32(5) of CGST Rules to be applicable, subject to the conditions of the Notification No. 08/2018 CT (Rate) dated 25.01.2018 being satisfied. (iii) Old Jewellery:- Articles of jewellery and parts thereof will fall under Heading 7113 of the GST tariff attracting rate applicable to HSN. The pro....
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....rate as given by this Authority but challenged the decision which disallowed to them the benefit of Rule 32(5) of the CGST Rules, 2017 and that the applicant was required to pay tax @ 12% on the sale value of such goods. (iii) Antique Jewellery : The applicant agreed with the HSN Code, classification and the tax rate as given by this Authority but challenged the decision which disallowed to them the benefit of Rule 32(5) of the CGST Rules, 2017 and that the applicant was required to pay tax @ 12% on the sale value of such goods. (iv) Antique Books : The applicant agreed with the HSN Code, classification and the tax rate as given by this Authority but challenged the decision which disallowed to them the benefit of Rule 32(5) of the CGST Rules, 2017 and that the applicant was required to pay tax @ 12% on the sale value of such goods. 5.4.3 The Appellate Authority observed that, they had to only decide the limited issue of the applicability of Rule 32(5) of the CGST Rules, 2017. 5.4.4 The Appellate Authority held that SAPL (Astaguru.com) was eligible to take the benefit of Rule 32(5) for the said products, viz. Paintings bought from individual art collectors, Antique Watches, An....