{"id":854,"date":"2018-09-01T07:27:01","date_gmt":"2018-09-01T07:27:01","guid":{"rendered":"http:\/\/khannaandassociates.com\/blog\/?p=854"},"modified":"2018-09-01T07:27:01","modified_gmt":"2018-09-01T07:27:01","slug":"inward-supply-of-second-hand-goods","status":"publish","type":"post","link":"https:\/\/khannaandassociates.com\/blog\/inward-supply-of-second-hand-goods\/","title":{"rendered":"Inward supply of second-hand goods :"},"content":{"rendered":"<p><strong>Inward supply of second-hand goods<\/strong><\/p>\n<p>When a registered second-hand goods dealer buys used goods, the supply can be either from a registered person or unregistered person. Let us look at the tax implication in both these cases:<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_75 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/khannaandassociates.com\/blog\/inward-supply-of-second-hand-goods\/#Inward_supply_from_registered_person\" >Inward supply from registered person<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/khannaandassociates.com\/blog\/inward-supply-of-second-hand-goods\/#Inward_supply_from_unregistered_person\" >Inward supply from unregistered person<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/khannaandassociates.com\/blog\/inward-supply-of-second-hand-goods\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h4><span class=\"ez-toc-section\" id=\"Inward_supply_from_registered_person\"><\/span>Inward supply from registered person<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>When a registered second-hand goods dealer purchases used goods from a registered person, the supplier is liable to charge tax at the rate applicable to the goods. If the second-hand goods dealer opts for the margin scheme, the dealer cannot take input tax credit of the tax paid.<\/p>\n<p><strong>Example:<\/strong>\u00a0Veena Marts purchases 5 used computers from a registered dealer in Karnataka, Lakshmi Solutions, for total value of Rs. 1,00,000.<\/p>\n<p>Here, Lakshmi Solutions will levy CGST + SGST @ 9% each on the supply (Rate applicable to computers is 18%). Hence, CGST + SGST of Rs. 9,000 each is incurred by Veena Marts on this purchase. If Veena Marts has opted for the margin scheme, they cannot take the ITC of CGST + SGST of Rs. 9,000 each.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Inward_supply_from_unregistered_person\"><\/span>Inward supply from unregistered person<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>When a registered second-hand goods dealer purchases used goods from an unregistered person, the recipient is liable to pay tax on reverse charge. However, if the second-hand goods dealer opts for the margin scheme, the dealer will\u00a0<strong>not be liable to pay tax<\/strong>\u00a0on reverse charge on inward supplies from unregistered persons.<\/p>\n<p><strong>Note:<\/strong>\u00a0There can be scenarios where a registered second-hand goods dealer purchases used goods from a consumer. As sale by consumers is not a supply under GST (Should be in the course or for the furtherance of business), there is no tax liability on the purchase of used goods from consumers by second-hand goods dealers.<\/p>\n<p><strong>Example:<\/strong>\u00a0Veena Marts, which has opted for the margin scheme, purchases a used camera from an unregistered dealer in Karnataka, for value of Rs. 10,000.<\/p>\n<p>Here, Veena Marts is not liable to pay CGST + SGST of Rs. 1,400 each (GST rate applicable to cameras is 28%) on reverse charge.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>For second-hand goods dealers, the margin scheme has been given as an option for paying tax on supply of second-hand goods. The benefit of opting for the margin scheme is that the dealer needs to pay tax only on the margin earned on sale. This is very useful for dealers who mostly purchase used goods from end customers. As there is no applicability of input tax credit on these purchases, these dealers need to pay tax only on the margin earned on sale. However, dealers opting for the scheme should ensure that ITC on the goods is not availed and the goods are supplied as is or after minor processing which does not change the nature of the goods.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Inward supply of second-hand goods When a registered second-hand goods dealer buys used goods, the supply can be either from a registered person or unregistered person. Let us look at the tax implication in both these cases: Inward supply from registered person When a registered second-hand goods dealer purchases used goods from a registered person, &hellip; <a href=\"https:\/\/khannaandassociates.com\/blog\/inward-supply-of-second-hand-goods\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Inward supply of second-hand goods :&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"_links":{"self":[{"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/posts\/854"}],"collection":[{"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/comments?post=854"}],"version-history":[{"count":1,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/posts\/854\/revisions"}],"predecessor-version":[{"id":855,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/posts\/854\/revisions\/855"}],"wp:attachment":[{"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/media?parent=854"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/categories?post=854"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/khannaandassociates.com\/blog\/wp-json\/wp\/v2\/tags?post=854"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}