Taxing ‘Second-Hand’ Goods under GST: Guidance from the ECJ

Abstract

The Goods and Services Tax (‘GST’) regime has sought to replace the earlier indirect tax regime in a large measure. In the GST design an attempt has been made to incorporate international best-practices.

One such aspect is composition-scheme for business dealing in second-hand goods. While the GST provisions incorporate such scheme, there is not enough elaboration of its contours and a lone provision in the subordinate legislation in the sole repository of this scheme.

In this background it is only expedient to draw upon the international appreciation of the second-hand goods composition-scheme to cull out the nuances underlying such scheme.

A recent decision of the European Court of Justice exemplifies these aspects further and serves as an appropriate guidance to develop a framework for pragmatic appreciation of the scheme.

Keywords: Value Added Tax, Goods and Services Tax, GST, Second-Hand Goods

JEL Classification: H25, K34