Gold and Jewellery dealer is registered as Composition Dealer under GST and paying Tax @1% on Sales regularly. As per the nature of business the dealer use to purchse the old gold jwellery from customer(i.e. URD Purhases) and making new ornaments from them and use to sale on counter. Query is - in cased of composition Gold dealer wherer URD gold purchase is allowed or not, if URD purchases are there then what will be GST tax treatment.?

Reply- Provisions of reverse charge will not applicable on old Gold purchase. As per Press release dated 13.07.2017 even though the sale of old Gold by an individual is for a consideration, it cannot be said to be in the course or furtherance of his business (as selling old Gold jewellery is not the business of the said individual), and hence does not qualify to be a supply per se. 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.