Selling old jewellery to attract 3 per cent GST: Hasmukh Adhia

NEW DELHI: Selling old jewellery or bullion will attract 3% Goods and Services Tax on the value realised, revenue secretary Hasmukh Adhia has said.

But if the jewellery is sold and new one is bought out of the proceeds, then the 3 % tax paid will be deducted from the 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% GST under reverse charge. So, if old jewellery worth Rs 1 lakh is sold, a GST of Rs 3,000 will be deducted, he said.

“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% GST would be levied on the charges.

“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% on gold, while any form of job work attract 5% levy. When asked about the tax to be levied on downloading of movies and television shows on Netflix, he said the US company was paying service tax, which will now be replaced by GST.