Selling of old jewellery or bullion will attract a 3 per cent GST on the value realised, Revenue Secretary Hasmukh Adhia said on Wednesday.
But, if the jewellery is sold and new one bought through the proceeds, the 3 per cent tax paid will be deducted from the goods and services tax (GST) payable on buying new jewellery.
“Supposing I am a jeweller. Somebody comes to me with old jewellery, it is as good as buying gold. You can later claim input tax credit,” he said at the GST Master Class.
Explaining further Adhia said a jeweller buying old jewellery from someone will charge 3 per cent GST under reverse charge. So, if old jewellery worth Rs 1 lakh is sold, a GST of Rs 3,000 will be deducted. If the proceeds from the old jewellery is used for buying new jewellery, the tax paid on sale will be adjusted against GST on the purchase, he said.
However, if an old jewellery is given to the jeweller for some modification, then it would be considered as job works and 5 per cent GST would be levied.
However, if an old jewellery is given to the jeweller for some modification, then it would be considered as job works and 5 per cent GST would be levied.