Case Details:

Aadhya Gold Private Limited

Application No.:

Advance Ruling No. KAR ADRG 35/2021

Ruling pronounced by:

GST AAR Karnataka

Date of Ruling:

09-07-2021

• The applicant is engaged in the business of buying and selling of second-hand gold jewellery from unregistered persons (common man). After purchase, the second-hand jewellery is sold ‘as such’ without making any further processing except cleaning and polishing which don’t alter the nature of jewellery.
• Since, the purchase of second-hand jewellery is made mostly from unregistered person and hence there is no input tax credit available in the hands of the applicant.
• 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 applicant submits that all the conditions mentioned in Rule 32(5) of the CGST Rules, 2017 are satisfied as follows:
  (a) No ITC has been claimed on purchase of second-hand jewellery
  (b) Goods are sold ‘as such’. The used ornaments once purchased are not melted into bullion before selling the same to the buyer.