Value of supply in case of Sale & Purchase of Second Hand Goods under GST


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Summary of Rule 32(5) of CGST 2017: Value of supply in case of Purchase & Sale of Second Hand Goods:

1.  Value of supply shall be the difference between the selling price and purchase price.

2.  If Value of Supply is negative it shall be ignored.

3.  Condition:

  • Used goods as such or after such minor processing which does not change the nature of the goods, and
  • No input tax credit has been availed on purchase of such goods

Extract From Rule 32(5) of CGST 2017: Value of supply in case of Purchase & Sale of Second Hand Goods:

Notwithstanding anything contained in the provisions of this Chapter (i.e. Chapter-IV: Determination of Value of Supply), the value in respect of supplies specified below shall, at the option of the supplier, be determined in the manner provided hereinafter.

Where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored:

Provided that the purchase value of goods repossessed from a defaulting borrower, who is not registered, for the purpose of recovery of a loan or debt shall be deemed to be the purchase price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between the date of purchase and the date of disposal by the person making such repossession.


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