New Delhi, Jul 15
The Finance Ministry stated that Margin scheme is available for all registered traders. A trader who meets registration requirements such as, formal registration in buying and selling of second hand goods (including old and used empty bottles), conditions as laid down in Rule 32(5) of the Central Goods and Services Tax Rules, 2017, can avail the Margin Scheme.
The second hand goods are the used goods that do not change the nature of the goods even after minor processing and also where no input tax credit has been availed on the purchase of these goods.
The Finance Ministry clarified all the queries related to the Margin Scheme raised by the dealers in second hand goods and empty bottles in particular stating that, with respect to the Rule 32(5) of the Central Goods and Services Tax(CGST) Rules, any person dealing in buying and selling of second hand 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. This is known as the margin scheme.
Further, Notification No.10/2017-Central Tax (Rate), dated 28.06.2017 exempts Central Tax liable on intra-State supplies of second hand goods received by a registered person, dealing in buying and selling of second hand goods [who pays the central tax on the value of outward supply of such second hand goods as determined under sub-rule (5)] from any supplier, who is not registered. This has been done to avoid double taxation on the outward supplies made by such registered person, since such person operating under the Margin Scheme cannot avail input tax credit on the purchase of second hand goods.