OLD SILVER PURCHASES

"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."
— CBIC Press Release, 13 July 2017

Old silver bought from unregistered persons:

• No RCM. Used gold or silver bought from individuals isn't notified for RCM, and Sec 9(4) is limited to real estate promoters.

• On resale, the dealer can use the margin scheme (Rule 32(5)): GST on the difference between selling and purchase price, if no ITC was claimed. If the old silver is melted and sold as new articles, GST applies on full value.

Yes, generally. If a GST-registered person buys silver from an unregistered person, the purchase is generally covered by reverse charge under section 9(4) of the CGST Act, read with Notification 10/2017-Central Tax (Rate), as amended. The fact that the silver is old or second-hand does not, by itself, remove the RCM obligation. The recipient should account for GST at the rate applicable to the silver supply and may claim input tax credit if eligible.

Check that the seller is genuinely unregistered and that the transaction is a taxable supply made in the course or furtherance of business; personal, non-business sales may require a different analysis. This RCM treatment is for purchases on or after 10 October 2024, when the specified-goods notification took effect.

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