Page 193 - GSTL_16th July 2020_Vol. 38_Part 3

2020 ] IN RE : SAFSET AGENCIES PVT. LTD. 431
• Acquired after being used by another (Merriam Webster)
• Previously used or owned (dictionary.com)
• Used goods - Already owned or put to it for a purpose by someone
else (Cambridge English Dictionary).
• Previously used or owned; second-hand (dictionary.com).
• Employed in accomplish something, that has endowed used (Merri-
am Webster)
• Second-hand owned not new (Collins Dictionary).
51. It is seen from the above, that the terms ‘second-hand’ and ‘used’
are synonymous words. Goods can be called as second-hand’ or ‘used’ when
they are not new. It is used by someone else or by the original owner before they
are sold. In the instant case, the appellant is an auction dealer whose main busi-
ness is to sell jewelry, car, watches, antiques etc. It is their contention that most of
these are articles used by the original owners or persons selling such goods to the
appellant. It is also submitted by them that they do not perform any process on
such goods. It is seen from the web-site of the appellant - astaguru.com that the
appellant sells vintage collectible and rare antiques such as sculptures, paintings,
writing instruments, vintage cars etc. They are players in the secondary market.
A primary market refers to any goods when they come to the market for the first
time. The appellant being an auctioneer dealer sells personal effects or such other
goods in an auction which have not come in the market for the first time and
therefore it is called a secondary market.
52. Rule 32(5) gives the benefit of the margin scheme to the second-
hand or used goods and the rule is made up of the following parts :-
The taxable supply is provided by a person dealing in buying and sell-
ing;
of second-hand i.e. used goods;
as such or after minor processing which does not changed the nature of
goods;
where no ITC has been availed on the purchases of such goods.
A reading of the rule says that the value for tax purpose will be the dif-
ference between the selling price and purchase price. In the said case, the
appellant fulfills all the conditions of the rule. (1) The appellant is a seller
dealing in buying and selling second-hand goods. (2) The goods sold by
them are, as per their contention, second-hand or used goods which have
not come for sale for the first time in the market. (3) The appellant has
sold the goods as such and has done no processing on them. (4) No ITC
is availed by them on the purchase of those goods.
53. Therefore, if all the above conditions are fulfilled by the appellant
there seems to be no reasons in denying them the benefit of the margin scheme
contained in Rule 32(5) of the CGST Rules. The AAR has given the benefit to old
cars, old jewelry and old watches but have denied the benefit to paintings, an-
tique jewelry and antique watches. The only reason given by the AAR for coming
the said conclusion is that ‘paintings’ cannot be treated as used but have given
no further explanation as to why they should not be treated as used. Also no rea-
son is advanced in the order for denying the benefit to antique jewelry and an-
tique watches. As for ‘antique books’ no ruling is given, citing the reason as “ab-

GST LAW TIMES  16th July 2020  193