Expert verified | TL;DR |
| GST on gold is 3% on the gold value, same rate for all carats, all states, all formatsMaking charges on jewellery attract a separate 5% GSTGold ETFs/SGBs: have no GST at purchase; 18% on service chargesGold imports attract 6% customs duty (5% BCD + 1% AIDC) plus 3% IGST on the assessable valueSecond-hand gold can be taxed only on the profit margin under Rule 32(5), but conditions applyITC is blocked on gold coins or jewellery given as promotional gifts under Section 17(5)Jewellers must use correct HSN codesL 7108 for bullion, 7113 for jewellery, 7118 for coins |
In India, GST on gold is charged at 3% on the gold value for all formats — physical jewellery, gold coins, bars, and digital gold — regardless of purity (18K, 22K, or 24K) or state. Making charges on jewellery are taxed separately at 5% GST. Gold ETFs and Sovereign Gold Bonds (SGBs) attract 0% GST at purchase since they are treated as securities, not goods. Imported gold attracts 6% customs duty (5% BCD + 1% AIDC) plus 3% IGST on the assessable value. For second-hand gold, jewellers may pay GST only on the profit margin under Rule 32(5) of the CGST Rules, subject to conditions. These rates have remained unchanged since GST was introduced in July 2017 and were not revised in the September 2025 GST 2.0 rollout.
In gold purchase, there are different tax components: GST on the gold, GST on making charges, and in some cases, other statutory levies. Getting any one of these wrong can cost you money, either at the billing counter or in your GST returns.
In this guide, we cover the GST applicable rates across every gold format like physical gold, digital gold, Gold ETFs/SGBs, etc.
We also explain how charges are taxed, the customs duty and GST implications in case of imports, the margin scheme for second-hand gold, and a compliance checklist for jewellers and bullion traders.
Why GST on Gold Still Confuses Most Buyers
Most buyers assume one GST rate applies to every kind of “gold”. That is not correct and that is the main reason for confusion.
Dual GST Treatment
Under the Goods and Services Tax (GST) regime, gold and the services used to turn it into jewellery are treated as two separate supplies. Each gets its own tax rate.
This dual treatment is the main source of confusion for most buyers.
The final price of gold jewellery is made up of multiple components, and GST doesn’t treat them uniformly:
- The gold value itself attracts 3% GST
- Making charges (labour and craftsmanship) attract 5% GST
- Customs duty, a separate levy on imported gold, not a GST charge
- Capital gains tax is applicable when you sell gold, governed by income tax law, not GST
Investment Gold GST
Sovereign Gold Bonds (GGBs), digital gold and physical gold are not taxed the same way.
- SGBs and gold ETFs carry no GST at purchase, only an 18% GST on brokerage and service fees.
- Digital gold carries the same 3% GST as physical gold but often attracts additional platform fees
This inconsistency leaves many investors unsure about which option actually costs less.
Gold Purity GST
A third source of confusion is the idea that GST rates vary by state or by carat purity. They don’t.
GST on gold is 3% across all states, all carats: 18K, 22K, and 24K, and applies uniformly whether you buy from a small jeweller in Coimbatore or a large retailer in Mumbai.
Making charges are taxed separately at 5%, again uniformly across India.
Interstate GST
Interstate purchases and e-way bill rules also cause confusion. If you buy gold from a seller in another state, the GST charged is Integrated GST (IGST) instead of the usual split between CGST and SGST.
For jewellers, the rules around Input Tax Credit (ITC) and the ban on claiming credit for free samples under Section 17(5) further complicate compliance.
The 3% Rule: What It Applies To (and What it Doesn’t)
The 3% GST rate on gold is fixed. It does not change by purity, location, or seller type.
The GST Council kept this rate unchanged at 3% even after the September 2025 GST 2.0 rollout.
| Product Type | GST Rate | Applies To |
| 22K / 24K Jewellery (Metal) | ✔️ 3% | Weight × Rate |
| Digital Gold (Apps) | ✔️ 3% | Total Purchase |
| Gold Coins / Bars | ✔️ 3% | Total Value |
| Jewellery Making Charges | ❌ 5% | Labour/Wastage |
| SGBs / Gold ETFs | ❌ 0% | Financial Entry |
What the 3% Rate Applies To:
- Jewellery (All Purities): This includes 18K, 22K and 24K gold ornaments. The tax is charged only on the value of the gold, not the final billed amount.
- Gold Coins & Bars: Medallions and investment-grade bars sold by banks or jewellers are treated as goods and attract the same 3% on the purchase price.
- Raw Bullion: Manufacturing units and traders buying raw gold or dore bars must account for 3% when procuring the raw material.
- Digital Gold: If you buy gold through an app where the platform stores the metal in a vault (like SafeGold or OroPocket), GST of 3% is charged on the transaction value at the time of purchase.
REMEMBER:
GST is charged on the value of gold, not the weight. If gold costs ₹15,000 per gram and you buy 10 grams, the taxable value is ₹1,50,000 and GST is ₹4,500.
Also, purity does not change the GST rate, but it affects the price per gram. So a 22K item will have lower GST in rupees than a 24K item because its value is lower.
Where 3% GST Does Not Apply:
- Making Charges (5%): Labour, casting, polishing, and wastage are services (SAC 998892) are charged at 5% on the invoice.
- Sovereign Gold Bonds (SGBs): Since these are government securities recorded in your Demat account and not physical metal, there is 0% GST on the purchase entry.
- Gold ETFs & Mutual Funds: Buying units of Gold ETFs on the stock exchange does not trigger 3% because it is a financial transaction. However, the fund management (AMC) fees are subject to a different 18% GST.
- Second-Hand Gold (Margin Scheme): If a jeweller buys your old jewellery to resell it, they do not charge 3% on the full resale price. Instead, they pay tax only on the profit margin (difference between selling and purchase price).
The 3% GST on gold replaced a combined pre‑GST burden of roughly 1% excise duty plus around 1–1.2% VAT, which effectively raised the tax cost for buyers.
However, the offset is that jewellers can now claim Input Tax Credit (ITC) on their gold purchases, which was not available under the earlier regime.
GST on Making Charges — 5% with Bill Example
Under GST, making charges are classified as a supply of services and taxed at 5% (2.5% CGST + 2.5% SGST).
A jeweller charges you (the labour, design, and workmanship) for converting raw gold into finished jewellery.
This is separate from the 3% GST on gold value. When you buy jewellery, both can appear on your bill.
GST Bill Example
Scenario 1: Ready-made jewellery from a showroom (composite supply)
When you walk into a jewelry store and buy jewellery off the shelf, the sale is treated as a composite supply. The gold and the making charges are bundled together as a single product.
In this case, the principal supply (gold, at 3%) determines the rate for the entire transaction. The full value, including making charges, is taxed at 3%.
This rule benefits you as a buyer because the effective tax rate on the making portion drops from 5% to 3%.
But here, the jeweller cannot claim ITC separately on making services in this case because the supply is bundled. Most large retail chains prefer this route for standard inventory.
Scenario 2: Custom-made jewellery (separate supply)
When you commission jewellery, either by providing your own gold or placing a specific order, the jeweller raises a separate charge for making.
This is a separate supply of goods (gold) and services (making). GST applies independently:
- 3% on the value of gold
- 5% on the value of making
For you as a buyer, the 5% on making is slightly higher than the composite route, but for the jeweller, this separation is necessary to claim ITC on outsourced labour, design fees, or job-work charges.
Sample Bill: Custom-made Vs Ready Made Jewellery:
Custom‑made gold necklace:
| Line Item | Amount (₹) |
| Gold value (20g @ ₹15,000/g) | ₹3,00,000 |
| Making charges | ₹12,000 |
| GST on gold @ 3% | ₹9,000 |
| GST on making charges @ 5% | ₹600 |
| Total payable | ₹3,21,600 |
Ready‑made gold necklace:
Same necklace, same gold weight, same making cost, but purchased off the shelf as a single product.
| Line Item | Amount (₹) |
| Gold value (20g @ ₹15,000/g) | ₹3,00,000 |
| Making charges | ₹12,000 |
| Total taxable value | ₹3,12,000 |
| GST @ 3% (composite supply) | ₹9,360 |
| Total payable | ₹3,21,360 |
Compare the two totals. The composite supply costs you ₹240 less (₹3,21,360 vs ₹3,21,600) because the making portion was taxed at 3% instead of 5%.
What to check on your bill:
Always ask your jeweller for an itemised invoice that shows:
- Gold value separately
- Making charges separately
- GST on each component
If your jeweller won’t provide an itemised invoice, you have no way of verifying whether you’re paying the right rate or whether the GST being collected is actually being deposited with the government.
Making charges for jewellery repair and restoration also attract 5% GST. This applies even if you’re not buying new jewellery, just getting an old piece repaired or resized.
GST on Gold Coins, Bars and Bullion
Gold coins, bars, and bullion are the cleanest category in gold taxation. There are no making charges, no craftsmanship fees, just the metal and a flat 3% GST on its value.
HSN Codes:
Under GST, every product must be classified under a Harmonised System of Nomenclature (HSN) code. For gold:
- HSN 7108: Gold in raw and semi-finished forms: unwrought gold, gold in powder form, gold bars and dore
- HSN 7118: Gold coins (commemorative and investment coins)
- HSN 7113: Gold jewellery and articles of precious metal
These codes must appear on invoices and in GST return filings. Misclassification between 7108 and 7113, for instance, can create mismatches in GSTR returns and trigger scrutiny notices.
Buying gold coins from banks:
Banks sell gold coins across branch networks and online platforms. The 3% GST applies here exactly as it does with jewellers.
There is no exemption or reduced rate because the seller is a bank. A 5-gram coin purchased from SBI and a 5-gram coin from a local jeweller, same GST.
Price calculation for gold bars:
| Line Item | Calculation | Amount (₹) |
| 10-gram 24K gold bar @ ₹15000/gram | — | 1,50,000 |
| GST @ 3% | 3% of ₹1,50,000 | 4,500 |
| Total cost | — | 1,54,500 |
No additional charges apply. This simplicity makes gold bars and coins the preferred format for investors who want pure exposure to gold price movements without the making charge component.
ITC on gold coins, blocked under Section 17(5):
If a business buys gold coins to distribute them as customer incentives, sales promotions, or gifts, the ITC on that purchase is blocked under Section 17(5)(h) of the CGST Act.
The Karnataka AAR in M/s Biostadt India (2018) confirmed this: gold coins distributed under an unconditional promotional scheme were treated as “gifts,” and the blocked‑credit provisions under Section 17(5) overrode the general ITC eligibility rules under Section 16.
However, where gold coins are provided to dealers or customers only on meeting predefined conditions (for example, sales‑target‑based incentives), later Karnataka AAR rulings have held that such items are not “gifts” and may be treated as supplies, allowing ITC on the acquisition of the coins, subject to GST on the deemed supply.
Digital Gold, Gold ETFs and SGBs — GST Applicability
Gold investment has diversified significantly. Most people holding gold today own some mix of physical metal, digital holdings, ETF units, or sovereign bonds.
The GST treatment of each is different:
Digital Gold
Digital gold is essentially a promise from a platform (like MMTC-PAMP, Augmont, or Paytm) that you own a specific weight of 24K gold stored in a vault. You receive the gold in physical form if you request delivery.
Under GST law, digital gold is treated exactly like physical gold. The moment you hit “buy” on the app, the platform charges 3% GST on the total transaction value.
For example: You buy ₹1,00,000 worth of digital gold. Your payment will be ₹1,03,000 (including ₹3,000 GST). However, unlike physical gold, there are no making charges
If you later convert your digital gold into physical form (delivery of coins or bars), GST applies again at the point of delivery, 3% on the metal value, plus 5% on any making charges for coins.
Some platforms waive delivery charges up to a certain holding period. Make sure you confirm the GST treatment before requesting physical delivery.
Platform charges including storage fees, insurance premiums, trustee fees are taxed at 18% GST as financial service charges. These are separate from the gold purchase and add up the actual cost of holding digital gold.
Gold ETFs
Gold ETFs (Exchange Traded Funds) are units traded on the NSE or BSE that represent physical gold held by the fund (usually 1 gram).
Because an ETF unit is a financial security and not a delivery of gold, there is 0% GST on the purchase or sale of the unit itself. You will not see a 3% tax deducted at the time of buying.
However, the fund house charges an expense ratio (roughly 0.5% to 1% per year) to manage the gold. That management fee attracts 18% GST, which is built into the net asset value (NAV). It is not billed separately to investors.
Sovereign Gold Bonds (SGBs)
SGBs are issued by the Reserve Bank of India (RBI) on behalf of the government.
You pay the issue price based on the average gold rate. On purchase, there is no GST at all. On the interest earned (2.5% per annum, paid semi-annually), you pay income tax as per your slab.
On the capital gain at maturity (8 years), the gain is completely exempt from tax when redeemed with the RBI. No other gold asset offers this.
If you sell SGB units on the stock exchange before maturity, capital gains tax of 12.5% (without indexation) applies instead.
The government paused fresh SGB issuances in February 2024. You can still trade the existing tranches on the secondary market through demat accounts. No GST applies on secondary market transactions.
| Gold Form | GST on Purchase | Notes |
| Physical jewellery | 3% + 5% on making charges | Both rates apply |
| Physical coins/bars | 3% | No making charges |
| Digital gold | 3% | Platform fees: 18% separately |
| Gold ETF | Nil | Securities transaction |
| Sovereign Gold Bond | Nil | Government security |
| Gold Mutual Fund | Nil on gold; 18% on AMC fee | AMC fee embedded in NAV |
From a pure GST perspective, ETFs and SGBs are the most tax-efficient way to buy gold.
The 3% upfront cost on digital gold and physical gold represents a real drag on return, particularly for short-term purchases.
GST on Gold Imports — Customs Duty + GST Interplay
India imports almost all the gold it consumes. Less than 1% of gold used in Indian jewellery is mined locally.
That means every gold bar, coin, or ornament you buy has crossed an Indian port at some point. When that happens, two distinct taxes apply: customs duty (levied by the central government) and IGST (a form of GST on imported goods).
Current Import Duty Structure
The government slashed the basic customs duty (BCD) on gold from a high of 15% (in early 2024) to 6% in July 2024, and further to 5% in the Union Budget 2026.
Here is the complete breakdown:
| Component | Rate | Purpose |
| Basic Customs Duty (BCD) | 5% | Core import tax |
| Agriculture Infrastructure & Development Cess (AIDC) | 1% | Fund farm infrastructure |
| Total effective customs duty | 6% | Levied at the port of entry before GST |
The 6% is the total import duty you pay at the customs barrier. That 6% applies regardless of whether the importer is a bank, a jeweller, or a traveller crossing the duty-free allowance.
GST Layer on Top
Once the customs duty has been calculated, the government then applies Integrated GST (IGST) at 3% on the assessable value. This includes CIF value (cost + insurance + freight) plus BCD, AIDC and any other applicable cesses.
Example: Suppose a Mumbai importer brings in gold with a CIF value of ₹1,00,00,000.
| Step | Calculation | Amount |
| CIF value | (given) | ₹1,00,00,000 |
| BCD (5%) | ₹1,00,00,000 × 5% | ₹5,00,000 |
| AIDC (1%) | ₹1,00,00,000 × 1% | ₹1,00,000 |
| Total customs duty | ₹5,00,000 + ₹1,00,000 | ₹6,00,000 |
| Value for IGST | CIF + BCD + AIDC | ₹1,06,00,000 |
| IGST (3%) | ₹1,06,00,000 × 3% | ₹3,18,000 |
| Total landed cost | CIF + BCD + AIDC + IGST | ₹1,09,18,000 |
The effective total tax incidence on imported gold is roughly 9.18% on the original CIF value (6% customs duty + 3% IGST applied on the higher base).
The importer can claim ITC on the IGST paid at import, provided the gold is used for taxable downstream supplies like manufacturing jewellery for sale.
This ITC is then offset against output GST on jewellery sales, reducing the effective tax burden.
Input Tax Credit (ITC) on Imported Gold
For a GST‑registered bullion dealer or jeweller, the 3% IGST paid at the time of import is available as ITC.
You can set off that ₹3,18,000 (in the example above) against your GST liability when you sell the gold within India.
However, Section 17(5) restrictions still apply: if you give away any of that imported gold as a free sample or gift, the corresponding ITC is blocked.
One important distinction: when you import gold dore bars (semi‑pure gold bars containing 80–95% gold), you still pay the same 6% customs duty + 3% IGST on the full value.
Refining that dore into pure gold does not change or reduce the import‑tax incidence, because the customs duty and IGST are levied at the time of import and are not recalculated after refining.
Second-Hand Gold: Margin Scheme & ITC Rules
The second-hand gold market where the jewellers buy old ornaments from customers and resell them, has a specific GST framework.
It’s also one of the most litigated areas in gold-related GST compliance, with conflicting advance rulings creating genuine uncertainty.
The Margin Scheme under Rule 32(5) of the CGST Rules, 2017
Rule 32(5) of the CGST Rules, GST is levied only on the positive difference or margin between the selling price and the purchase price, rather than on the full sale value. The original purpose is to avoid double taxation on goods that have already suffered GST once.
Conditions to use the margin scheme:
- You are a registered dealer dealing in second‑hand goods (i.e., used goods resold “as such” or after minor processing that does not change their basic nature).
- You do not claim ITC on the purchase of those second‑hand goods.
- You sell the goods “as such” or after only minor processing that does not change their basic nature (for example, cleaning, polishing, or light refurbishment; not full remaking or manufacturing).
- The margin (selling price minus purchase price) is taken as the taxable value; if the margin is negative (sale at a loss), GST is not payable, and the negative margin is simply ignored.
Example:
| Description | Amount (₹) |
| Old gold jewellery purchased from customer | 90,000 |
| Sold to another buyer | 1,00,000 |
| Taxable margin | 10,000 |
| GST @ 3% on margin | 300 |
| If purchase price > selling price | Nil GST |
Conflicting AAR Positions
A series of Advance Ruling (AAR) decisions have created uncertainty about the validity of the margin scheme.
Let’s take a look:
- Karnataka AAR, M/s Attica Gold Pvt. Limited (2020): Allowed the margin scheme. Confirmed that a dealer buying used jewellery from unregistered persons and selling it without changing its form qualifies under Rule 32(5).
- Kerala AAR, M/s Best Money Gold Jewelry Limited (2023): Denied the margin scheme and held that gold can never be “second-hand” because its value does not diminish with use.
- Karnataka AAR, M/s White Gold Bullion Pvt. Limited (2023): Where the applicant purchased used jewellery and melted it before resale, the margin scheme was denied, the change in physical form disqualified it.
These rulings are binding only on the specific applicants but create precedent risk for others in the same business.
The safest position currently: apply the margin scheme only where gold is sold in exactly the same form as purchased, without any melting, recasting, or structural modification.
GST Compliance Checklist for Jewellers
The jewellery sector is consistently a high-focus area for tax authorities because of the high value of goods and the complexity of the rules.
Staying compliant protects your business from audits, interest, and penalties. This checklist covers the most critical compliance areas that every jeweller needs to track.
1. GST Registration
Registration under GST is mandatory if your business’s annual turnover exceeds the threshold limit. For most states, the limit for supplying goods is ₹40 lakh, while for some special category states, it is ₹20 lakh
Registration is mandatory without any turnover threshold if you:
- Make inter-state supplies of gold jewellery.
- Are required to pay tax under the Reverse Charge Mechanism (RCM).
- Are a casual taxable person or a non-resident supplier.
As a jeweller, you are eligible for the Composition Scheme but with significant conditions.
You cannot opt for it if you make inter-state supplies, or if you want to collect or claim Input Tax Credit (ITC).
2. HSN Code Accuracy on Invoices
An incorrect HSN code is a major red flag for a tax audit.
Here is a breakdown of the correct codes for your inventory:
| Product | HSN Code | Applicable GST Rate |
| Gold Jewellery (Plain/Studded) | 7113 | 3% |
| Gold Bullion & Bars (Unwrought/Semi-manufactured) | 7108 | 3% |
| Gold Coins | 7118 | 3% |
| Silver Jewellery | 7113 | 3% |
| Imitation Jewellery | 7117 | 5% or 18% |
| Making Charges | 9988 | 5% |
Turnover above ₹5 crore requires 8-digit HSN codes; up to ₹5 crore, 4-digit codes are acceptable.
3. Invoice Structure
Your invoice needs to be clear. You cannot club everything together and charge a single GST rate of 3%. This is the most common mistake in the jewellery trade.
- For composite supply (ready jewellery), one consolidated GST rate of 3% is applied on the total value
- For custom jewellery orders, issue separate tax lines: 3% on gold value, 5% on making charges
- Second-hand goods invoices must explicitly state “second-hand goods” if availing the margin scheme
- All GST invoices must carry GSTIN, HSN code, taxable value, and GST amount for each line
Mandatory fields on every invoice:
- Your GSTIN (GST Identification Number) and the buyer’s GSTIN if B2B.
- HSN code of the principal goods.
- Quantity, taxable value, and GST rate for each distinct line item.
- Whether the tax is CGST+SGST or IGST (for inter-state sales).
4. ITC Claims
Input Tax Credit is a valuable right for a registered jeweller, but you cannot claim just anything. =
You can claim ITC on:
- Gold purchases from registered suppliers
- Job work charges (even when paid under RCM for unregistered job workers)
- Input services used in the business (rent, professional fees, etc.)
You cannot claim ITC on:
- Gold coins or jewellery gifted as promotional incentives (Section 17(5)(h))
- Any purchase made under the margin scheme, ITC is blocked as a condition of the scheme
5. Return Filing
- GSTR-1: Report all outward supplies with HSN-wise summary. Monthly deadline: 11th of the following month. Quarterly (under QRMP): 13th of the month after each quarter
- GSTR-3B: Tax payment and summary return. Monthly or quarterly depending on turnover bracket
- GSTR-9: This is your annual return, reconciling your monthly/quarterly filings for the entire financial year. It is due by December 31st of the following year.
- Mismatches between GSTR-1 and GSTR-3B data, particularly in ITC claimed vs. available in GSTR-2B, generate automated notices
Missing return deadlines triggers late fees and restricts you from generating E-Way bills.
The GSTN portal now automatically prevents the filing of any return that is more than three years past its due date.
This means you cannot leave returns pending for years; they will be permanently locked, leading to serious compliance issues.
6. Reverse Charge Mechanism (RCM)
You are responsible for paying GST on the job work charges if your job worker (goldsmith) is not registered under GST. This is called the Reverse Charge Mechanism.
In that case, you are the one who must pay the 5% GST directly to the government
You can subsequently claim ITC on this tax paid, provided the output jewellery is used for taxable supply.
7. E-Way Bill
Gold and jewellery (Chapter 71) are currently exempt from mandatory e-way bill generation under Rule 138(14) of the CGST Rules.
Optional e-way bills may be generated for documentation. Monitor CBIC notifications closely, as this exemption has been periodically reviewed and amended in the past.
8. Export Compliance
File a Letter of Undertaking (LUT) annually to export without GST payment. Maintain proper records of export invoices, shipping bills, and related documents.
Refund claims for accumulated ITC on inputs must be filed within the prescribed period; delays can lead to loss of refund eligibility.
PKC Tax Advisory for Gold & Jewellery Businesses
Gold and jewellery businesses have to manage high-value transactions, complex GST provisions, income tax scrutiny, and evolving advance rulings.
A misapplied margin scheme, an incorrect ITC claim, or an improperly structured import transaction can lead to substantial tax demands and penalties.
PKC Management Consulting has worked closely with prominent gold and jewellery retailers, and has a granular understanding of the compliance challenges specific to this sector.
What PKC’s tax advisory covers for gold and jewellery businesses:
- GST compliance: GSTR-1, GSTR-3B, and annual return filing; HSN code review; invoice structure audit
- ITC optimisation: reviewing eligible credits, identifying blocked credit risks, and ensuring RCM obligations are met
- GST audit and scrutiny defense: representing clients in departmental audits, assessments, and appellate proceedings
- Import transaction structuring: advising on the customs duty and IGST interplay for gold imports; ITC claim strategy for importers
- Second-hand gold compliance: advising on the applicability and conditions of the margin scheme in light of current AAR rulings
- Income tax advisory: capital gains on gold sales, disclosure obligations, and handling of search and survey cases
- Concurrent audit: ongoing audit programs to ensure day-to-day operations, internal controls, and tax compliance stay on track
For gold and jewellery businesses navigating GST uncertainties from ITC disputes to export refund delays to margin scheme eligibility, we offer a structured advisory approach backed by deep sector knowledge.
Our team and advisory approach
The rules change frequently. The GST 2.0 framework introduced in September 2025 changed certain slabs and thresholds. Our team tracks every notification and judicial ruling so you do not have to.
You can book a free 30-minute consultation through our website. In that call, we will:
- Review your current GST structure and identify visible gaps.
- Assess your filing history and ITC claims.
- Provide a roadmap for full compliance.
- Quote a fee for ongoing advisory and filing services.
No endless retainers. No junior associates making guesses. Just direct access to CA-qualified professionals who understand your business.
FAQs
Q1: What is the GST rate on gold jewellery in India 2026?
Gold jewellery attracts 3% GST on the gold value and 5% GST on making charges. The 3% rate applies uniformly across all carats (18K, 22K, and 24K) and across all states. The rate has not changed since GST was introduced in July 2017. Hallmarking does not alter the rate.
Q2: Is GST charged separately on making charges?
Yes, but only when jewellery is custom-made. Making charges are taxed at 5% as a supply of services, separate from the 3% on gold value. For ready-made jewellery purchased off the shelf, the entire transaction is treated as a composite supply and GST is charged at 3% on the principal rate for gold.
Q3: Can I claim ITC on gold purchases for my business?
Yes, if you are GST-registered and the gold is used for taxable business supplies, manufacturing or resale. ITC is also available on job work charges, including those paid under RCM for unregistered workers. ITC is blocked under Section 17(5) if gold coins or jewellery are distributed as promotional gifts or sales incentives.
Q4: Is there GST on digital gold and gold ETFs?
Digital gold attracts 3% GST at purchase, the same as physical gold. Gold ETFs and Sovereign Gold Bonds (SGBs) are exempt from GST at purchase since they are securities transactions, not goods purchases. However, platform service fees on digital gold including storage, insurance, trustee charges attract 18% GST as financial service charges.
Q5: How is GST calculated on second-hand gold?
Under the margin scheme (Rule 32(5), CGST Rules), GST is paid only on the difference between the selling price and purchase price — not the full sale value. Conditions: gold must be bought from an unregistered individual, sold without change in form, and no ITC claimed. If purchase price exceeds selling price, no GST applies.
Q6: What is the GST on gold imports and customs duty?
Imported gold attracts 5% Basic Customs Duty (BCD) and 1% Agriculture Infrastructure and Development Cess (AIDC), adding to 6% customs duty. On top of this, IGST at 3% is levied on the assessable value (CIF value plus customs duties). Importers can claim ITC on the IGST paid.
Q7: Do I pay GST if I inherit or receive gold as a gift?
No. Inheriting gold or receiving it as a gift is not a supply of goods under the GST Act, so no GST is triggered. GST applies only when gold is sold or supplied commercially. Note: income tax rules apply separately when you eventually sell inherited or gifted gold, capital gains tax is calculated from the original owner’s purchase cost.
