Question And Answer
Subject: gst on old gold exchange
Category: 
Querist: kollipara sundaraiah
Answered by:
Tags: ,
Date: July 13, 2025
Query asked by kollipara sundaraiah

sir,

If I purchase a new gold jewel from a jewellery by exchanging old gold jewels or gold coins or gold bars how is the gst to be charged? Should I pay GST on the total value of gold jewel or on the net value of new jewel after deducting the value of the old jewel or gold coins or gold bars handed over to the jeweller along with gst on making charges of the new jewel. Please clarify if gst is to be paid again on the intrinsic value of gold involved in making the new jewel just like a new purchase even though a 24k gold bar or gold coin on which the gst is already paid is exchanged with the jeweller for compensating the amount of gold involved in making the jewel. For eg. If I purchase a 20 g new jewellery by exchanging it for 15 g gold, the gst is to be paid on the entire 20 g value of gold involved in making the new jewel or only on the excess 5 g gold that goes into jewel making in addition to the 15 g supplied by the consumer. If gst is supposed to be charged only on the excess gold’s value but the jeweller charges gst on the entire value of new jewel purchased irrespective of the gold handed over to him, what is the legal remedy?
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Answer given by

GST is payable only on the net value of new jewel after deducting the value of the old jewel or gold coins or gold bars handed over to the jeweller along with gst on making charges of the new jewel. If in the invoice, the jeweller has charged gst on the entire value of new jewel purchased irrespective of the gold handed over to him, you will have to file a complaint against him with the consumer forum and also the GST authorities.



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