GST on Gold – Current Tax Rates & Price Breakdown

Q: 1. What is the GST rate applicable to gold purchases in India?

A 3% GST is levied on the value of gold (whether coins, bars, or jewellery), and an additional 5% GST is charged on making charges for gold jewellery.

Q: 2. Is an Input Tax Credit (ITC) available on the purchase of gold?

Yes, registered dealers can claim ITC on gold purchases if the gold is used in the course of business (e.g., for manufacturing jewellery). However, ITC is not available to end consumers.

Q: 3. Is GST applicable on exchanging old gold for new jewellery?

Yes, GST is applicable only on the value of new jewellery minus the value of old gold exchanged. No GST is charged on the value of the old gold itself.

Q: 4. Are gold coins and bullion taxed differently from jewellery under GST?

No, both gold coins, bullion, and jewellery attract the same GST rate of 3%. However, only jewellery involves an additional 5% GST on making charges.

GstJul 16, 20256 Min min read

Written by LoansJagat Team

GST on Gold – Current Tax Rates & Price Breakdown

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Suman Singh set out to buy gold jewellery for her daughter’s wedding. At a reputed Delhi jeweller, she picked a stunning 22-carat gold necklace.

Here’s how her ₹1,00,000 gold purchase broke down:

Gold Price: ₹1,00,000
Making Charges (10%): ₹10,000
GST on Gold @3%: ₹3,000
GST on Making Charges @5%: ₹500
Total GST Paid: ₹3,500
Final Invoice Amount: ₹1,13,500

The jeweller explained that under GST rules:

3% GST is levied on the value of gold.
5% GST is applied to making charges (which vary, usually 8–12%).

Suman paid ₹13,500 in taxes and made charges over the base price, but she walked away confident, knowing exactly where every rupee went.

GST on Gold – A Short Introduction

In India, the Goods and Services Tax (GST) on gold is structured as follows:

3% GST on Gold: This applies to the value of gold, including gold coins and bars.
5% GST on Making Charges: This applies to the charges for crafting gold jewellery, such as necklaces and rings.

For example, if you purchase 10 grams of gold valued at ₹50,000 and the making charges are ₹5,000, the GST would be:

GST on Gold: ₹50,000 × 3% = ₹1,500
GST on Making Charges: ₹5,000 × 5% = ₹250
Total GST: ₹1,500 + ₹250 = ₹1,750

Therefore, the total GST payable would be ₹1,750.

It's important to note that GST applies to both domestic purchases and imports. For imported gold, customs duties may also apply.

This GST structure aims to standardise taxation across the country, replacing previous taxes like VAT and service tax, and ensuring transparency in the gold trade.

GST on Gold – Create a Table Mentioning Different Categories of Gold with Price and Applicable GST Rate

Category	HSN Code	GST Rate	Applicable To
Gold (Physical)	7108	3%

Example:

Gold Purchase ₹100,000
GST on Gold: ₹100,000 × 3% = ₹3,000
Making Charges: ₹10,000
GST on Making Charges: ₹10,000 × 5% = ₹500
Total GST Payable: ₹3,000 (on gold) + ₹500 (on making charges) = ₹3,500

HSN Codes for Gold – Create a Table Mentioning Gold Types with Their Respective HSN Codes

HSN Code	Product Description	GST Rate
7108	Gold (including gold bars and ingots)	3%
7113

Types of Gold and Their GST Applicability – Create a Table Mentioning Types of Gold and Their Applicable Tax Rates

Type of Gold	Purity	Form	GST Rate	Additional Notes
24K Gold	99.9%

Impact of GST on the Gold Industry with Examples

Aspect	Pre-GST Regime	Post-GST (2017 Onward)	Example
Tax Structure	VAT (1%), Excise Duty (1%), Entry Tax (varies by state)	Uniform 3% GST on gold + 5% GST on making charges

Input Tax Credit (ITC) on Gold

Also Read – How to Invest in Gold

Aspect	Details	Example
Eligibility	Registered gold businesses (manufacturers, traders, jewellers)	A goldsmith registered under GST buying gold bullion can claim ITC
Applicable GST Rates

Conclusion

In India, gold is subject to a 3% Goods and Services Tax (GST) on its value and an additional 5% GST on the costs of producing jewellery. All forms of gold, including jewellery, bars, coins, and digital gold, are subject to this tax. Although the GST replaced the former VAT and service tax system to provide uniformity and transparency, it has slightly increased the total cost to the customer.

FAQs Related to GST on Gold

1. What is the GST rate applicable to gold purchases in India?

A 3% GST is levied on the value of gold (whether coins, bars, or jewellery), and an additional 5% GST is charged on making charges for gold jewellery.

2. Is an Input Tax Credit (ITC) available on the purchase of gold?

Yes, registered dealers can claim ITC on gold purchases if the gold is used in the course of business (e.g., for manufacturing jewellery). However, ITC is not available to end consumers.

3. Is GST applicable on exchanging old gold for new jewellery?

Yes, GST is applicable only on the value of new jewellery minus the value of old gold exchanged. No GST is charged on the value of the old gold itself.

4. Are gold coins and bullion taxed differently from jewellery under GST?

No, both gold coins, bullion, and jewellery attract the same GST rate of 3%. However, only jewellery involves an additional 5% GST on making charges.

Other Important GST Pages
GST on AC	GST on Air Tickets	GST on Atta	GST on Banquet Hall	GST on Bikes
GST on Bread	GST on Building Materials

Disclaimer: The information published on LoansJagat is intended for general informational and educational purposes only and should not be considered financial, legal, or investment advice. Interest rates, loan terms, statistics, and other data may change over time and may vary by lender or source. Please verify the latest information and consult a qualified financial advisor or the respective Bank/NBFC before making any financial decisions.

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