No GST on sale of old gold jewelry, Cars by individuals

No GST on sale of old gold jewellery, cars by individuals, clarifies govt

• Individuals who want to sell their old jewellery or old vehicles will not have to pay GST  as the sale is not for furthering any business, the Revenue department clarified on Thursday.
• Income tax Secretary Hasmukh Adhia had said that ‘purchase of old gold jewellery by a jeweller from a consumer will be subject to GST at the rate of 3 percent under reverse charge mechanism in terms of the provisions contained in Section 9(4) of the Central GST Act, 2017.’
• The income tax dept said that the said section has to be read in conjunction with another section and “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.”ge. Reuters
• “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 said.
• Revenue department officials said the same principal 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 statement said that Section 9(4) of the said Act mandates that tax on supply of taxable goods (gold in this case) by an unregistered supplier (an individual in this case) to a registered person (the jeweller in this case) will be paid by the registered person (the jeweller in this case) under reverse charge mechanism.
• But since the sale is not in consideration for the furtherance of business no tax will apply.
• It however said the tax would apply if an unregistered business sells gold ornaments to registered supplier.
• “However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under RCM will apply,” it added.
• A supplier is defined as the one who buys or sells in furtherance of his business. We look forward for your valuable comment www.carajput.com

GST on the sale of old cars

For those interested in understanding who is impacted and required to pay GST on the sale of old cars, CNBC provides a simplified explanation.

Gold Coins/Bars

Buy gold coins/bars for pure investment.
Buy jewellery for personal or family use with emotional value

Pros

• Purity: Usually 22K or 24K, often with certification
• No Making Charges: Value is based almost entirely on gold price
• High Liquidity: Easily sold or exchanged at banks and jewellers
• Investment-Friendly: Closely tracks actual gold market value

Gold Jewellery

Pros

• Dual Purpose: Acts as both investment and wearable asset
• Emotional Value: Especially useful during weddings and festivals
• Buyback Friendly: Most jewellers accept old ornaments

Cons

• Making & Wastage Charges: Can be 8–25%, reducing resale value
• Purity Concerns: May include 18K/20K gold or stones
• Design Depreciation: Trendy styles may lose resale demand

Gold Coin vs Gold Jewellery – Comparison

• Gold Coins → Better for pure investment due to higher purity, lower making charges, and better resale value.

• Gold Jewellery → Better for use + emotional value, but not efficient as an investment (loss of value on resale due to high making charges).

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