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Where a registered second-hand goods dealer makes the supply of used goods and HAS NOT availed ITC on its purchase, the value per Rule 32(5) is:
ADifference between selling price and purchase price (if negative, value is ignored)
BPurchase price
CSelling price minus 10%
DSelling price
Answer & Solution
Correct answer: A. Difference between selling price and purchase price (if negative, value is ignored)
1. Rule 32(5) — margin scheme for second-hand goods dealers (who have not availed ITC).
2. Value = difference between selling price and purchase price.
3. If the difference is negative (loss), the value is ignored for that transaction (not netted against profits).
_Source: ICAI BoS CA Final Paper 8, Ch 5 "Value of Supply", §Rule 32(5)_
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