Advance Ruling- In the instant case, the applicant has sought Advance Ruling on the following question:

In case the applicant has purchased used/second hand gold jewellery or ornaments from persons who are not registered under GST and that at the time of sale of such goods there is no change in the form/nature of such goods and ITC will also not be availed on such purchase, if so the case, whether GST is to be paid only on the difference between the selling price and purchase price as stipulated under Rule 32(5) of CGST Rules, 2017?

The applicant has stated that they are engaged in the business of buying and selling of old/used/second hand gold jewellery/ornament from the unregistered person, who are all general public and will be sold ‘as such’ to the end consumers. They are also having branches across Tamil Nadu. They have stated that the used/second hand gold ornaments are sold in the same form in which they are purchased to another registered or unregistered person, except for some minor processing in the form of cleaning and polishing but without altering the nature of such ornament/jewellery. 

They have stated that as they have purchased old/used/second hand gold jewellery/ornament from the unregistered persons there is no scope for availment of Input tax credit as per Section 16 of the CGST Act for them as such unregistered person will not charge GST. They have stated that presently they are charging GST at 3% [CGST-1.50% ; TNGST -1.50%] on the entire consideration received from the customers on account of sale of such old/used/second hand gold jewellery/ornament. In view of the above facts, the applicant is seeking the authority to determine the value of supply as per Section 15 (5) of CGST act read with Rule 32(5) of CGST Rules, 2017.

Held that- In the instant case, from the documents furnished, there is no clear cut link between purchase & sale, and the applicant do not furnish the purchase details and grammage in the sale invoice. Thus the applicant has not furnished with the documentary proof that he satisfies the conditions provided under Rule 32(5) enabling him to adopt the differential value as prescribed in the said rule. Hence, No ruling is extended.