Exchange Of Silver Scrap For Finished Ornaments Is ‘Supply’ Under GST; E-Way Bill Not Mandatory: AAR
Exchange Of Silver Scrap For Finished Ornaments Is ‘Supply’ Under GST; E-Way Bill Not Mandatory: AAR
The Tamil Nadu Authority of Advance Ruling (AAR) has held that the exchange of silver scrap for finished ornaments is ‘supply’ under Goods and Service Tax (GST).
The bench of B.Suseel Kumar and Balakrishna S. has observed that E-way bill is not mandatory for the movement inter-state and intra-state involving purchase and sale of silver scrap, silver ornaments and silver fine.
The applicant, M/s. PSB Traders is engaged in the business of crafting sliver products using raw materials like silver and copper. These materials come in various purities, affecting the value of the silver bars. They purchase silver bars from vendors located outside Tamil Nadu, process them along with copper and fashion them into silver ornaments. Sometimes they also outsource these processes through job work.
The applicant sought the advance ruling on the issue: does barter exchange apply to B2B transactions where payments are made without the involvement of bank transactions? Specifically, is the exchange of silver scrap for finished ornaments under GST laws considered a supply, despite the absence of monetary payments?
Yet another issue raised was is the E-way bill mandatory for purchase and sale of silver scrap, silver ornaments and silver fine? In situations involving delivery challan or supply on approval, job work and repair when is an e-way bill required?
The AAR ruled that barter system is covered under the scope of 'supply' and specifically exchange of silver scrap for finished ornaments will be considered a 'supply' under the GST law, despite the absence of monetary payments. In this regard, it may also be noted that Schedule I to the CGST Act, 2017, specifies activities to be treated as supply even if made without consideration.
The AAR clarified that transportation or movement of precious metals and metals clad with precious metal falling under chapter 71 get covered for E-way bill exemption straightaway vide Sl.No.4 of the above table. Further, jewellery, silversmith wares and other articles of Chapter 71, also get: covered vide Sl.No.5 of the table above, with the exception of Imitation Jewellery under HSN 7117.
The AAR held that the E-way bill is not mandatory for the movement of goods in question in situations involving supply on approval, job work and repair of silver bars and ornaments.
Ruling Details
Applicant’s Name: M/s. Paaragiri Balaraman Nagarajeswaran
Ruling Date: 09.05.2025
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Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
