Patna HC: Disciplinary Authority Cannot Impose Major and Minor Penalties in a Single Order  ||  Calcutta HC: Landlord Decides His Residential Needs; Courts Cannot Set Living Standards in Eviction  ||  Orissa HC: Second Marriage During Subsistence of First Remains Invalid Even After First Wife's Death  ||  Karnataka HC: Appeals Against Acquittal in Bailable Offences Lie Only Before High Court  ||  Supreme Court: Stamp Duty on an Agreement to Sell is Leviable Only if Possession is Transferred  ||  SC: Motive Becomes Irrelevant When Direct Evidence Such as a Dying Declaration is Available  ||  Supreme Court Issues Directions to CoC in Builder Insolvency Cases To Protect Homebuyers’ Interests  ||  MP High Court: Women Retain Reservation Benefits After Marriage if Caste is Recognized in Both States  ||  Allahabad HC: Police Must Prosecute Informants of False Firs, and IOs May Face Contempt if They Fail  ||  MP HP: Over-Age Candidate Cannot Claim Age Relaxation Due to Delay in Earlier Recruitment    

Further clarification on tax in reverse charge on gold ornaments- (Press Information Bureau) (13 Jul 2017)

MANU/PIBU/0760/2017

Indirect Taxation

In the GST Ki Master Class held yesterday, in one of the replies given to an on-the-spot-question, it was informed that purchase of old gold jewellery by a jeweller from a consumer will be subject to GST @ 3% under reverse charge mechanism in terms of the provisions contained in Section 9(4) of the CGST Act, 2017. On further examination, it is felt that the issue needs to be clarified.

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. This provision, however, has to be read in conjunction with section 2(105) read with section 7 of the said Act. Section 2 (105) defines supplier as a person supplying the goods or services. Section 7 provides that a supply is a transaction for a consideration by a person in the course or furtherance of business.

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 on such purchases. However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under RCM will apply.

Tags : REVERSE CHARGE   GOLD ORNAMENTS   TAX   CLARIFICATION  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved