Vat on gold
This query is : Resolved
14 February 2012
What are the consequences if i invest in Gold coin for short term regarding VAT charges at the time of purchase and sales? Do the investor is charged both the times for the duty? Plz reply
21 February 2012
Dear Rachna
Vat formality is to be done only by dealers. As you are individual you need not have to comply for VAT unless your turnover excedd 5 lacs
Vat formality is to be done only by dealers. As you are individual you need not have to comply for VAT unless your turnover excedd 5 lacs
28 February 2012
But i have to pay VAT and when i m going to resale shall have to bear the consequences?i.e. vat charge.... i m not asking for formalities of legal compliance. plz clarify
02 August 2025
Here’s how VAT works on gold coins for a short-term investor:
1. **At the time of purchase:**
* You **pay VAT** when you buy gold coins from a registered dealer. This VAT is part of the purchase price.
2. **At the time of sale:**
* If you sell gold coins **as a dealer** (business), you will charge VAT on the sale price and can claim input credit for VAT paid on purchase.
* If you are an **individual investor** selling gold coins privately (not as a dealer), VAT does **not apply on resale** because resale by individuals is typically outside the VAT net.
* However, if you **sell as a dealer**, VAT will apply again on the sale price.
3. **For short-term holding:**
* As an investor (non-dealer), you effectively bear VAT only once at purchase.
* On resale, as an individual, you usually don’t pay VAT.
---
**Summary:**
| Role | VAT on Purchase | VAT on Sale |
| --------------------- | ---------------------- | ---------------- |
| Individual (Investor) | Yes (paid once) | No |
| Dealer | Yes (can claim credit) | Yes (charge VAT) |
---
**Note:** VAT is mostly relevant for dealers; individuals pay VAT embedded in the price when buying but are generally not liable to charge VAT when selling.
If you want, I can help clarify based on your exact role or state laws, since VAT rates and rules vary a bit by state.
1. **At the time of purchase:**
* You **pay VAT** when you buy gold coins from a registered dealer. This VAT is part of the purchase price.
2. **At the time of sale:**
* If you sell gold coins **as a dealer** (business), you will charge VAT on the sale price and can claim input credit for VAT paid on purchase.
* If you are an **individual investor** selling gold coins privately (not as a dealer), VAT does **not apply on resale** because resale by individuals is typically outside the VAT net.
* However, if you **sell as a dealer**, VAT will apply again on the sale price.
3. **For short-term holding:**
* As an investor (non-dealer), you effectively bear VAT only once at purchase.
* On resale, as an individual, you usually don’t pay VAT.
---
**Summary:**
| Role | VAT on Purchase | VAT on Sale |
| --------------------- | ---------------------- | ---------------- |
| Individual (Investor) | Yes (paid once) | No |
| Dealer | Yes (can claim credit) | Yes (charge VAT) |
---
**Note:** VAT is mostly relevant for dealers; individuals pay VAT embedded in the price when buying but are generally not liable to charge VAT when selling.
If you want, I can help clarify based on your exact role or state laws, since VAT rates and rules vary a bit by state.
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