9911796707
TMI Blog2023 (5) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... vely). The applicant is engaged in the business of purchase and sale of used gold (Second hand goods). 3. The applicant has sought advance ruling in respect of the following questions: i. Whether the applicant purchasing second hand gold in the form of jewellery / parts of jewellery, from unregistered individuals and sells to registered / unregistered dealers, after melting the same, in the form of lumps / irregular shapes of gold, without changing the nature, (i.e.,) Gold remains gold, has to pay GST on the margin difference between the sale price and purchase price as stipulated in Rule 32(5) of CGST Rules, 2017? ii. Whether the HSN Code for Old Gold Jewellery purchased and after melting the purchased old gold jewellery is 7113? 4. Admissibility of the application: The question is about the "Classification of any goods or services or both" and the "determination of the liability to pay tax on any goods or services or both" and hence is admissible under Section 97(2)(a) and 97(2) (e) of the CGST Act 2017. 5. BRIEF FACTS OF THE CASE: The applicant furnishes some facts relevant to the issue: 5.1 The applicant has stated that they are engaged in the business of purchase and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inor processing on such goods. (d) The Supplier has not claimed Input Tax Credit on the purchase of such goods. (e) The Supplier has not changed the nature of the goods. 6. Applicant's Interpretation of Law: 6.1 The applicant states that condition (a) i.e the supply should be a taxable supply, is fulfilled by the applicant as the supply of second hand goods is taxable under the GST Act and is covered under Chapter 71 under Tariff Item No. 13. As per Notification No. 01/2017- Central Tax (Rate) dated 28th June, 2017, the said item is taxable at 1.5% under the CGST Act and similarly taxable under the KGST Act, 2017 also at 1.5%. 6.2 The condition stipulated at point (b), (c), (d) & (e) i.e. the supplier should be dealing in buying and selling of second hand goods, minor processing should be done, no Input Tax credit should have been claimed on the purchase of such goods and there should not be any change in nature, the applicant as stated above is clarifying that they are only dealing in second hand goods and are not claiming any GST Input credit on the purchases. On the Old Jewellery which are marketable, they are only cleaning and polishing them. On the other hand, the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AL HEARING / PROCEEDINGS HELD ON 21.02.2023 7. Sri V. Sudhindranath, Advocate and Duly Authorised Representative appeared for personal hearing proceedings held on 21.02.2023 and reiterated the facts narrated in their application. FINDINGS & DISCUSSION 8. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the applicant in their application for advance ruling. We have also considered the issues involved on which advance ruling is sought by the applicant and the relevant facts along with the arguments made by their authorized representative and also their submissions made during the time of hearing. 10. The Applicant has sought to know whether the applicant purchasing second hand gold in the form of jewellery / parts of jewellery, from unregistered individuals and sells ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.1 Now let us verify whether the Applicant satisfies the second condition mentioned supra at para 10.2. The applicant states that they purchase the used old gold jewellery from the unregistered persons and if they are marketable, they supply the same after cleaning and polishing it. On the other hand, the jewellery / parts which are non-marketable, the applicant is melting it into gold lump / irregular shapes and supply the same. 11.2 Now let us look into the classification of gold jewellery and gold lumps. We observe from Custom Tariff Act 1975 that chapter 71 covers 'Natural Or Cultured Pearls, Precious Or Semi-Precious Stones, Precious Metals, Metals Clad With Precious Metal, And Articles Thereof; Imitation Jewellery; Coin'. In terms of Chapter Notes 4(A), the expression "precious metal" means silver, gold and platinum. Tariff heading 7113 covers Articles Of Jewellery And Parts Thereof, Of Precious Metal Or Of Metal Clad With Precious Metal as under: TARIFF ITEM DESCRIPTION OF GOODS 7113 ARTICLES OF JEWELLERY AND PARTS THEREOF, OF PRECIOUS METAL OR OF METAL CLAD WITH PRECIOUS METAL Of precious metal whether or not plated or clad with precious metal: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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