GST on old gold jewellery: Do you have to pay tax when selling?

GST on old gold jewellery: With gold prices reaching record highs, many people are heading to jewellers to sell their old gold jewellery. But as they look to cash in on those outdated necklace pieces, one question keeps cropping up: "Do I need to pay GST when I sell my old gold?"

The short answer? It depends on who’s selling it.

GST on gold

⦁ If an individual like you or me sells old jewellery to a jeweller, no GST is applicable.

⦁ If a registered dealer or an unregistered gold seller sells it, GST is applicable.

⦁ When the jeweller resells the old jewellery, 3% GST is applied on the resale.

Back in July 2017, during a GST masterclass, the government clarified how the Reverse Charge Mechanism (RCM) works in this context.

Reverse charge shifts the responsibility of paying GST from the seller to the buyer, but only in specific situations.

Under Section 9(4) of the CGST Act, 2017, if an unregistered seller supplies goods to a registered buyer, the registered buyer must pay GST under RCM.

However, the government later clarified that this doesn't apply when an individual (not in the business of selling gold) sells their old jewellery.

“Even though the sale of old gold by an individual is for consideration, it cannot be said to be in the course or furtherance of business… Hence, it does not qualify as a ‘supply’ under GST and is not taxable,” the government had then said in an official clarification.

Now, this is where GST comes into play.

If an unregistered supplier sells gold to a registered jeweller, then GST is applicable under reverse charge.

If you are just a regular individual looking to sell old gold jewellery to a jeweller, you don’t need to worry about GST.