Hyderabad: With Navaratri season prompting brisk gold and silver shopping, many people are exchanging old ornaments for new ones. This has raised questions about whether GST applies when individuals sell old gold.
Currently, gold purchases attract 3% GST, a rate that remains unchanged despite recent tax updates on September 22. However, officials have clarified that this tax does not apply when ordinary individuals sell old gold to jewellers.
GST on old gold applies only to dealers, not individuals
According to government clarification, such a transaction is not considered a “supply” under GST because individuals are not engaged in business activity. Therefore, they do not fall within the GST net.
In contrast, if the seller is a registered or unregistered gold dealer or jeweller, then GST at 3% is applicable under the reverse charge mechanism. This means dealers must account for tax when buying old gold from other dealers.
The key takeaway is that private individuals exchanging or selling their old jewellery do not have to pay any GST. Only business entities dealing in gold must comply with tax provisions in such cases.
