old gold manufacturing in gst

361 views 2 replies

Dinesh Banthia

32 Points Joined September 2018

Hello,
we are a Retail Jewellers
Before gst when our customers bring there old gold for remaking we charge vat tax only on there excess gold.
But since gst is implemented we stop customer manufacturing. Now we are charging on full valuation as a new purchase. Hence there old gold is converted to URD purchase as now there is no tax . Here has to bear tax again and again.
So please can you help into this matter if there any clause in gst to save tax & once again we can start
customer manufacturing.
Thanks! Dinesh Banthia

Replies (2)

Pankaj Rawat

GST Practitioner

55062 Points Joined June 2017

Dear As per Valuation Rule in GST the The GST will applicable on Transaction Value (The selling price)

Let's suppose Customer gives U a gold for RS. 100/- & your transaction value (Selling price) is 500, then GST will be applicable on 500/- & RS 100 will be reduce from total amount 500+GST

Dinesh Banthia

32 Points Joined September 2018

Here suppose customer brings 50gms for remaking to 60gms. we then give a Receipt showing the New ornament to make in 60gms. Details will be shown like this, 60 -50= 10 gm×3200.00 @ gm gold rate +making charge 2500.00=34500.00+1.20%vat 414.ooTotal =34914.0000
Then as perG-11/12 we still follow manufacture thru goldsmith.
Above is the practice which were doing during vat regime.
My question here is does the same practice we have to follow in gst or is there any change. Because we had a doubt in gst regime that tax had to be collected on whole value(60gms)of manufactured ornament.
Hope you now understand my doubt.please clear us to again re start old gold manufacturing of customers.
Thanks! Dinesh Banthia