GST on Sale of Gold Ornaments by an Individual to Jewellers
Sale of old jewellery by an individual to a jeweller will not make the jeweller liable to pay tax under reverse charge mechanism on such purchases; However, if an unregistered supplier of gold ornaments sells it to registered supplier, the GST under RCM will apply.
Even though the sale of old gold by an individual is for a consideration, it cannot be said to be in the course or furtherance of his business (as selling old gold jewellery is not the business of the said individual), and hence does not qualify to be a supply. Accordingly, the sale of old jewellery by an individual to a jeweller will not attract the provisions of Section 9(4) and jeweller will not be liable to pay tax under reverse charge mechanism on such purchases.
However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under RCM will apply.