The finance ministry has announced that there will be no GST on the sale of old jewelry, will not attract provisions of section 9(4) of the CGST (Central GST) Act. According to the new rule, the jeweler doesn’t need to pay tax under reverse charge mechanism on such purchases. However, if an unregistered supplier of gold ornament sells it to the registered supplier, in that case, the tax under the reverse charge mechanism will be applied.
Besides, there will be no GST on the annual subscription, fees charged as lodging, boarding by educational institutions from its students for hostel accommodation. The ministry said,”Thus, services of lodging boarding in hostels provided by such educational institutions which are providing pre-school education and education up to higher secondary school or equivalent or education leading to a qualification recognized by law, are fully exempt from GST”.
Also if the aggregate turnover of such RWA is up to ₹20 lakh in a financial year, then such supplies would be exempted from GST even if charges per member are more than ₹5,000″. But an RWA shall be required to pay GST on monthly subscription contribution charged from its members if such subscription is more than ₹5000 per member and the annual turnover of the RWA by way of supplying of services and goods is also ₹20 lakh or more.
The ministry also announced that the tax burden on RWAs will be lower as they would now be entitled to input tax credit in respect of taxes paid by them on capital goods such as generators, water pumps, lawn furniture etc, and input services such as repair and maintenance services. Input tax credit of central excise and VAT paid on goods and capital goods were not available in the pre-GST period while these were previously a cost to the RWA.