Tax on exhange of old jewellery

This query is : Open

SHUBHANSHU USRETE (Querist)

24 September 2017 Hello,
Suppose there is a situation where Mr.A (Jewelery Shopkeeper) & Mr.B (Customer), Mr.B went to Mr.A's shop for buying some jewelery worth Rs.10000/- & he exchanged some of his old jewelery for Rs.3000/- & on billing Mr.A charged tax @3% on Rs.10000/- i.e he collected Rs.300/- from Mr.B in form of tax. But, Mr.B argued with Mr.A that you should charge tax on after deducting Rs.3000/- from Rs.10000/- i.e. on Rs.7000/-.
Who is correct Mr.A or Mr.B ?
Please do reply.
Thank You.!

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)

24 September 2017 Mr.B is correct as on old goods sale you have to pay tax on margin........

Message likes : 2 times

RAJA P M

RAJA P M (Expert)

24 September 2017 Yes. I agreed to CA Rashmi Gandhi... You can collect Tax on leased value... Also you ll pay Tax under RCM basis for the received gold...

Message likes : 1 times

Vishakha Kejriwal.

Vishakha Kejriwal. (Expert)

25 September 2017 There are two separate supply transactions -- sale of old jewelry by customer and supply of jewelry by shop-keeper. Mr. A is correct in charging 3% on transaction value of jewelery Rs. 10000/-. In so far as supply of old jewelry by Mr. B is concerned GST liability would depend on whether sale by Mr. B is registered/unregistered and whether the sale in is in the course of business.

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SHUBHANSHU USRETE

SHUBHANSHU USRETE (Querist)

25 September 2017 Mr. B is a normal individual & Mr.A has made the sale to customer i.e. end user.
Now, on what price to charge tax.?

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SHUBHANSHU USRETE

SHUBHANSHU USRETE (Querist)

25 September 2017 Thank u CA Rashmi Mam.

Message likes : 2 times

SHUBHANSHU USRETE

SHUBHANSHU USRETE (Querist)

25 September 2017 But Raja Sir, Mr.A has not received goods above Rs.5000/- so he is not liable to pay tax under RCM..??