The government on Friday clarified that jewellers will not need to pay the Goods and Services Tax (GST) under reverse charge mechanism on old jewellery purchases from individuals. Even though the sale of old gold by an individual is for a tax 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 individual and hence does not qualify to be a supply in itself.

However, if an unregistered supplier of gold ornaments sells it to registered supplier, the tax under reverse charge mechanism will apply.

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