CGST Sections

Buying and selling of second hand goods will not attract Goods and Services Tax (GST)


16.07.2017: The buying and selling of second-hand goods will not attract Goods and Services Tax (GST) if sold at a price cheaper than the purchase price, the government said on Saturday.

Rule 32(5) of the Central Goods and Services Tax (CGST) Rules, 2017, provides that where a taxable supply is provided by a person dealing in buying and selling of second-hand goods or used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored. This is known as the margin scheme.

The clarification comes after doubts were raised regarding the applicability of the Margin Scheme under the GST for dealers in second-hand goods in general and for dealers in old and used empty bottles in particular.

The value will be the difference between selling and purchase price.   If the value of such supplies is negative then it will be ignored.  Provided there is no change in nature and credit on purchased second-hand goods is not availed by the dealer. In case the value determined is negative, i.e. goods are sold at loss then tax will not be payable,”.

Thus, Margin Scheme can be availed of by any registered person dealing in buying and selling of secondhand goods (including old and used empty bottles) and who satisfies the conditions as laid down in Rule 32(5) of the Central Goods and Services Tax Rules, 2017.  Read more from original source

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