The Authority of Advance Ruling ( AAR ) has held that GST does not apply to buying and selling second-hand paintings the authority confirms the applicability of section 32(5) of the CGST Act, 2017.
The applicant M/S. Saffron Art Private Limited registered under GST Actprocures ‘Paintings’ on an approval basis from unregistered and registered persons and sells the same by auction to the highest bidder. The Applicant sold paintings by way of auction online to the highest bidder. It was assumed by the applicant that suppliers have brought the ‘Paintings’ second hand or used and offered for sale and the Applicant applied Rule 32(5) of CGST & MSGST Rules, 2017 for levying of the tax.
It was contended by the applicant that they purchase and sell second hand or used ‘Painting’ and do not avail ITC on the purchases of such ‘Paintings’ and claimed provision Rule 32(5) of CGST & MSGST Rule, 2017.
The appellant authority observed that the provisions of Rule 32 (5) of the CGST Rules applied to the applicant in respect of second-hand goods. Buying and selling of second-hand goods will not attract Goods and Services Tax (GST) if sold at a price cheaper than the purchase price
The AAR bench comprising of Mr. Rajiv Magoo (Central tax) and Mr. T. R. Ramnani (State tax) observed that the applicant has dealt only in second-hand paintings, the applicant was buying second-hand paintings and selling the same on their website to the highest bidder and no input tax credit is being availed on the purchases of such ‘Paintings’. The authority held that the provisions of Rule 32(5) of CGST Rules could apply to the applicant.
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