GST impact on jewellery: Selling gold items to attract 3 pct impost, says Hasmukh Adhia

Explaining further Adhia said a jeweller buying old jewellery from someone will charge 3 per cent GST under reverse charge.

Selling of old jewellery or bullion will attract a 3 per cent GST on the value realised, Revenue Secretary Hasmukh Adhia said today. 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.

“But, if I am saying that take my old jewellery melt it and give me a new one, then it means that trader is a registered person and it is as good as buying gold in form of old jewellery,” he said. Under the GST regime rolled out from July 1, tax is levied at 3 per cent on gold, while any form of job work attract 5 per cent levy. When asked about the tax to be levied on downloading of movies and television shows on Netflix, he said the US company is paying service tax, which will now be replaced by GST.

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On advertisements given in website or blogs, Adhia said if the money is earned by way of providing services then GST would be levied. However, the ministry would soon clarify various provisions related to advertisements on websites after seeing stakeholder representation.

Adhia further said businesses and traders willing to avail the composition scheme will have to choose the option by logging into the GSTN portal by July 21. Whereas, for new registrations, they have to give their own choice at the time of filing up forms for registration. Besides, as per the rules, account records for GST will have to be preserved for six years. However, if any case is locked up in litigation, then the records have to be preserved till the litigation gets over.

Small businesses with a turnover of up to Rs 75 lakh can opt for composition scheme in which traders, manufacturers and restaurants can pay tax at 1 per cent, 2 per cent and 5 per cent, respectively. Businesses opting for the composition scheme will see a lesser compliance burden as they will have to file returns only once in a quarter as against monthly returns to be filed by other businesses.

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