GST ON EXCHANGE

Save Share

This query is : Open

Quick Summary

This discussion clarifies how Goods and Services Tax (GST) is applied when a jeweller exchanges old gold ornaments for new ones. The consensus is that GST is levied on the full value of the new ornaments supplied (Rs. 1,00,000 in this case), as this represents the total value of the supply. The consideration received includes both cash and the old gold.

NIRMAL DAVE

NIRMAL DAVE (Querist)

25 November 2023 Dear Experts,

A registered jeweler purchase old gold ornaments worth Rs. 50,000/- from his customer (Unregistered) and in exchange of that sale new gold ornaments worth Rs. 1,00,000/- to the same customer. Then on which value GST shall be collected on Rs. 50,000/- or on Rs. 1,00,000/- for this transaction.

Jeweler will receive only Rs. 50,000/- in cash/bank and the rest Rs. 50,000/- in form of old gold.

Thanking You
Nirmal Dave

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)

25 November 2023 GST will be applicable on Entire 1,00,000/- because Value of Supply for the Jeweller is Entire amount and Consideration is recevied in cash and in kind.

Things would have been different if Jeweller would supplied same ornaments with minor changes then it would have been qualified under Rule 32(5) and GST would have been applicable on Margin Amount

NIRMAL DAVE

NIRMAL DAVE (Querist)

27 November 2023 Thank You Sir for your valuable advise.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now