The Authority of Advance Ruling (AAR) ruled that Input Tax Credit can be claimed on the ‘second-hand gold jewellery’ only in the case if it is purchased from a registered person under Goods and Service Tax (GST).

The applicant, M/s Attica Gold Private Limited is a private company, which is engaged in the business of purchasing second-hand gold jewellery from unregistered persons and selling the same to others.

The applicant filed an application for advance ruling seeking clarification that whether applicant dealing in second-hand goods and tax is to be paid on the difference between the selling price and purchase price as stipulated in Rule 32(5) of CGST Rules, 2017 if dealer purchases used / second-hand gold jewellery from individuals who are not dealers under the GST and at the time of sale there is no change in the form/ nature of goods.

The other issue which the applicant put forth was whether ITC is allowed to be claimed if purchases are made from the dealer from whom marginal scheme if applicable?

The authority consisting of members Dr Ravi Prasad and Mashhood Ur RehmanFarooqui held that Input Tax Credit can be claimed on ‘second-hand gold jewellery’ only in the case if it is purchased from a registered person.

“In case the applicant dealing in second-hand goods and invoicing his supplies as ‘second-hand gold jewellery’ the valuation of the supply of second-hand gold jewellery which is purchased from individuals who are not dealers under the GST and there is no change in the form/ nature of such goods, can be made as prescribed under  Rule 32(5) of CGST Rules, 2017.