D. Buying and Selling of Second Hand Goods
There are cases where persons or entities deal in buying and selling of second hand goods i.e., used goods. Such goods are supplied either as such or after such minor processing that does not change the nature of goods. Furthermore, no input tax credit has been availed on the purchase of such goods.
Thus, the value of supply of such services shall be the difference between the selling price and the purchase price. However, the value of such supply shall be ignored if the difference is negative.
This value can be ignored only if the following condition is satisfied. According to this condition, the purchase value of goods repossessed from an unregistered defaulting borrower for the purpose of recovery of a loan 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.
And such a purchase value is between the date of purchase and the date of disposal by the person making such repossession.