Sale of Old Jewellery, Vehicles will Not Attract GST: Union Government


Kochi: The Union Government has made it clear that the sale of old gold jewellery as old vehicles by individuals will not attract any Goods Services Tax (GST). Earlier, the government had said that sale of old gold jewellery will attract 3 per cent GST via the reverse charge mechanism.

However, if an unregistered supplier of gold ornaments sells it to a registered supplier, GST will be applicable under the reverse charge mechanism. The Department of Revenue under the Union Ministry of Finance said in an official statement that “even though the sale of old gold by an individual is for a consideration, it cannot be said to be in the course or furtherance of his business (as selling old gold jewellery is not the business of the 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 (RCM) on such purchases,” it added. Revenue Department officials said the same principle will apply on sale of old cars or two-wheelers and no GST will be payable even though the supply would be for a consideration.

The government clarification comes after Hasmukh Adhia IAS, Revenue Secretary, in his reply to a question during an interactive session had said that purchase of old gold jewellery by a jeweller from a consumer will be subject to GST at the rate of 3 per cent under reverse charge mechanism, in line with the provisions contained in Section 9(4) of the Central GST (CGST) Act, 2017.