Home / GST / Beware! No GST for selling old gold

Beware! No GST for selling old gold

Beware! No GST for old gold On the new GST regime, people are mostly unaware whether GST is applicable for a particular product and how much is the tax rate for that. Some of the retail jewelry shops are collecting GST for selling old gold jewels. They are charging 3% GST which is applicable only for new gold ornaments.

Generally GST is charged on the raw materials and it will be collected from the consumers on selling end product. Raw material for gold jewelry can be gold biscuits and coins for which the shop owners pay GST and it will be collected from the consumer.

But on the reselling of gold ornaments, there is no new raw material involved; thus there is no GST. If you resell your old gold jewel and get cash, there is no GST applicable for you. If you resell a used gold ornament and purchase a new one, either the jeweler can charge 3-4% GST directly on new ornament or they can collect GST from the old ornament and it should be deducted from your new jewel purchase amount.

For example, if you sell an ornament worth Rs. 1 lakh and buy a new one worth Rs. 1.25 lakhs. GST that needs to be paid is 3% of new jewel value which is Rs. 3,750.00 (3% of Rs.1.25 lakhs). In case, the jeweler charges 3% GST for your old jewel which is Rs.3,000.00. On the purchase of new jewel, this Rs.3000.00 should be deducted from the tax amount Rs.3,750.00 and only the remaining tax amount Rs. 750 (3% of Rs. 25,000) needs to be paid as tax. If the jeweler charges Rs. 6,750.00 as GST (Rs. 3,750.00 for purchasing new jewel and Rs. 3,000.00 for selling old jewel), it is clear you are losing your money and paying excess tax.

Beware! It has been clarified GST is not applicable for used articles.

Check Also

E-way bill system in GST from October

E-way bill system in GST from October

The GST provision, requiring any good more than Rs 50,000 in value to be pre-registered …

Leave a Reply

Your email address will not be published. Required fields are marked *