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Under the current GST regime in India, all goldtransactions—whether for jewellery, bullion, or digitalformats—are taxed under a standardized structure designed tosimplify compliance and enhance transparency. A 3% GST is uniformly levied on the valueof 18K, 22K, and 24K gold, divided equally between Central GST(CGST) and State GST (SGST). Additionally, a 5%GST is applied specifically on making charges, which coverthe labour and craftsmanship costs involved in designing goldjewellery.
This system replaces the previously fragmented model of VAT,service tax, and excise duty, offering a single-point taxstructure. Whether you're buying a 22K bridalnecklace, 18K contemporary jewellery,24K investment-grade coins, oreven digital gold, GST is calculatedseparately for the metal value and the making charges, providingfull cost breakdown and billing transparency.
Quick Reference: GST Rates on Gold Components (2025)
| Gold Type / Component | GST Rate | Tax Basis |
|---|---|---|
| 18K, 22K, 24K Gold (Metal) | 3% | On intrinsic gold value |
| Making Charges (Labour) | 5% | On fabrication/service component |
| Digital Gold | 3% | On purchase value |
HSN Code Reference (for Businesses)
- HSN Code 7113 – Gold jewellery andarticles thereof
- HSN Code 9988 – Job work and makingcharges in jewellery services
Why Understanding GST on Gold Matters in 2025
Gold in India is more than just a luxury—it's afinancial asset, cultural staple, and investment tool. Knowing howGST is applied helps buyers plan purchases, compare rates moreaccurately, and avoid overpaying due to hidden or miscalculatedtaxes. For jewellers and bullion traders, this knowledge ensureslegal compliance and customer trust, especially in high-ticketsegments like 22K traditional jewellery or 24K bullion.
Moreover, for digital-savvy investors buying digital goldonline, GST is still applicable at 3%, which is important whencomparing investment options. Being informed about tax slabs,component-wise application, and updated rules not only empowersconsumers but also supports India's larger goal of formalizingthe gold economy and reducing cash-based, informal goldtransactions.
What is the GST on Gold?
The GST on gold in India is 3%, includingphysical, digital gold, and jewelry. This is split into1.5% CGST and 1.5% SGST. For example, a₹1,00,000 gold purchase attracts ₹3,000 GST, applicableto gold, coins, and bars.
What Are the GST Rates on Gold?
Taxes on gold in India vary based on transaction type.Here's how it works:
- GST on gold value: GST is applied to all goldpurchases, regardless of purity (22-carat, 24-carat, or18-carat).
- GST on Making Charges: 5% GST is added to goldjewellery making charges.
- GST on imported gold: Gold imported into Indiaattracts 12.5% customs duty and 3% IGST on assessable value (goldprice + customs duty).
As an example,
- Gold Value: ₹50,000
- Making Charges: ₹5,000
- GST on Gold (3%): ₹50,000 x 3% =₹1,500
- GST on Making Charges (5%): ₹5,000 x 5%= ₹250
Total GST Payable: ₹1,500 (on gold) +₹250 (on making charges) = ₹1,750. Taxplanning for gold purchases and investments is simplified by thisrate structure.
GST Rates on Gold
What is the GST on Purchases of Physical Gold?
Regardless of its form (bars, coins, or jewellery), GST on goldpurchases in India are subject to 3% (1.5% CGST + 1.5%SGST). An additional 5% GST is imposed on the makingcharges for gold jewellery. These taxes have replaced earlierlevies such as VAT and service tax, resulting in a uniform taxationsystem.
For example, if you buy gold worth₹1,00,000 with ₹10,000 in making charges, you'llpay ₹3,000 (3%) as GST on gold value and ₹500 (5%) asGST on making charges, bringing the total to ₹1,13,500.
Both buyers and businesses mustunderstand these rates, as they directly impact the final price ofphysical gold.
What is the GST on Gold Jewellery MakingCharges?
In the case of gold jewellery, the making charges are subject toa 5% GST under the GST framework. These making charges are used tocover the cost of the craftsmanship and labor involved in creatingthe jewelry.
For instance, if the making charges for your jewellery amount to₹5,000, the GST on making charges would be₹5,000 x 5% = ₹250. This amount isadded to the total cost of the jewellery, along with the 3%GST on the value of gold.
It is important for buyers to be aware of these additionalcharges when planning gold jewellery purchases. The governmentstreamlined taxation by introducing GST on making charges, ensuringconsistency throughout India. To ensure transparency, alwaysinquire with your jeweller if making charges are itemizedseparately.
What is the GST on Digital Gold?
Digital gold, another popular investment option, is alsosubject to 3% GST, just like physical gold. GST is appliedto the transaction value at the time of purchase for digital gold.Unlike physical gold, digital gold does not involve making charges,so there is no additional GST imposed.
For example, if you purchase digital gold worth ₹50,000,the GST will be ₹50,000 x 3% = ₹1,500,bringing the total cost to ₹51,500. Investors should also beaware that when selling digital gold, any capital gains are subjectto income tax as per applicable rates, adding an additional layerof compliance.
What is the 24 Carat Gold GST Rate in India?
The GST rate for 24-carat gold in India is 3%.This rate applies to both gold jewelry and gold coins, and isconsistent across various forms of 24-carat gold.
For example, if you purchase a 24-carat gold coin weighing 10grams for ₹50,000 with a 5% making charge (₹2,500), thetotal value becomes ₹52,500. The GST applied will be₹1,575 (3% of ₹52,500), making the final cost₹54,075.
What is the 22 Carat Gold GST Rate in India?
In India, the GST rate for 22-carat gold is 3%.This rate applies to gold jewelry and ornaments made of 22-caratgold, including gold coins and other items.
For instance, if you buy a 22-carat gold necklace weighing 50grams for ₹1,50,000 with a 5% making charge (₹7,500),the total value becomes ₹1,57,500. The GST charged will be₹4,725 (3% of ₹1,57,500), bringing the final price to₹1,62,225.
What is the 18 Carat Gold GST Rate in India?
The GST rate for 18-carat gold in India is also3%. This rate applies to gold items made from 18-caratgold, including jewelry, coins, and other forms of 18-caratgold.
For example, if you purchase an 18-carat gold bracelet weighing20 grams for ₹40,000 with a 5% making charge (₹2,000),the total value becomes ₹42,000. The GST applicable will be₹1,260 (3% of ₹42,000), making the final cost₹43,260.
How to Calculate GST for Gold?
To calculate the total cost of gold, including GST, follow thesesteps:
Step 1: Determine the Gold Value
Start with the market price of gold for the weight and purityyou want to purchase. For example, 10 grams of 22-caratgold = ₹50,000.
Step 2: Add Making Charges
The cost of crafting jewellery is charged by jewelers.
Let's assume making charges =₹5,000.
Step 3: Calculate GST on Gold Value (3%)
GST on the gold value is 3% of ₹50,000:₹50,000 x 3% = ₹1,500
Step 4: Calculate GST for Making Charges(5%)
GST on making charges is 5% of ₹5,000:₹5,000 x 5% = ₹250
Step 5: Add Everything
Add the gold value, making charges, and their respective GSTamounts:
Total Price = ₹50,000(Gold) + ₹5,000 (Making Charges) + ₹1,500 (GST on Gold)+ ₹250 (GST on Making Charges) Final Cost =₹56,750.
You can calculate your total gold jewellery purchase cost,including GST, by following this simple steps mentioned above.
Calculation:
| Step | Particulars | Calculation | Amount (₹) |
|---|---|---|---|
| 1 | Gold Price (10 grams, 22-carat) | Given | ₹50,000 |
| 2 | Making Charges (10% of gold price) | ₹50,000 x 10% | ₹5,000 |
| 3 | GST on Gold Value (3%) | ₹50,000 x 3% | ₹1,500 |
| 4 | GST on Making Charges (5%) | ₹5,000 x 5% | ₹250 |
| 5 | Total Cost | Gold + Making Charges + GST | ₹56,750 |
Checkout the HSN code for Gold
Impact of GST on Gold Prices
In 2017, the GST replaced earlier taxes such as VAT, exciseduty, and service tax with a unified 3% GST on gold value and 5%GST on making charges.
- Before GST: Gold buyers paid around 2% VAT and1% excise duty, resulting in non-uniform pricing and taxevasion.
- After GST: In comparison to pre-GST times,buyers now pay an additional 0.5%-1% in taxes compared to pre-GSTdays, but the 3% GST made pricing transparent and uniformnationwide. Although GST affected gold buyers, it simplified taxcompliance for businesses and encouraged fair trade practices.
Jewellery Sector Seeks Tax Relief in Budget 2025
In the upcoming Union Budget 2025, the jewellery industry isrequesting that GST rates be revised and gold monetisation measuresbe enhanced. To encourage compliance and make gold more affordable,stakeholders, including Malabar Gold & Diamonds and GJC, areadvocating a 1% GST on gold.
Demands:
- Reduced GST Rates: A cut from 3% to 1% to easethe burden on consumers.
- Improved Gold Monetisation Scheme: Involvereputed jewellers to encourage participation.
- Access to Finance: Simplify financing normsfor jewellers.
Industry leaders highlight that reducing taxation would boostconsumer demand, drive formalisation, and help the sector grow from$80 billion (FY24) to $145 billion byFY28.
Input Tax Credit for Gold Purchases
When gold is used for further production, resale, or businesspurposes, businesses registered under GST can claim input tax credit. Gold purchases made forpersonal use are not eligible for ITC. Buyers must have valid taxinvoices and comply with GST regulations in order to claimITCs.
Consideration Before Investing in Gold
- Be aware of GST Rates: Remember, gold attracts3% GST on its value and 5% on making charges forjewellery. Factor these taxes into your budget.
- Choose Between Physical or Digital Gold: Withdigital gold, you avoid making charges and only pay 3% GST.
Check Purity and Certification: Opt for BIS hallmarked gold toensure authenticity and resale value. - Invoice Transparency: For clarity andcompliance, always insist on a detailed invoice showing the goldprice, making charges, and GST separately.
- Monitor Market Prices: To offset GST expenses,buy gold during dips.
- ITC Eligibility: To reduce costs, claim anInput Tax Credit when buying gold for business purposes.
Consider these points when investing in gold to minimizeunnecessary costs.
Conclusion on GST Gold Rate
GST on gold affects everyone—whetheryou're buying jewellery, investing in digital gold, or runninga gold business. A 3% GST is charged on goldvalue, and 5% GST on making charges forjewellery, which adds to the total cost.
Knowing these GST rates and how GST is calculated helps you planyour purchases better. For businesses, staying compliant with GSTrules and using benefits like input tax credit can save money. Asgold remains a popular investment in India, understanding GST isimportant for making smart and cost-effective decisions. Stayinformed, calculate carefully, and make the most of your goldinvestments! To compute GST on gold jewellery, you need the adviceof experts such as Vakilsearch Indeed.
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FAQs About GST on Gold
Still have questions? Below are answers to the most commonqueries people have about GST on gold, helping you understand therates, making charges, and purchase guidelines with clarity.
What are the GST rates ongold?
The GST rate on gold in India is 3%,consisting of 1.5% CGST and 1.5% SGST. It applies to all forms ofgold, including jewellery, coins, and bars. For a ₹1,00,000purchase, GST is ₹3,000.
What is the GST on 22k gold?
The GST on 22k gold is 3% of thegold's value. Additionally, a 5% GST is applied on makingcharges for gold jewellery. These rates apply uniformly acrossIndia, ensuring transparency in pricing.
How much tax do you pay on 1 gramof gold?
Post-GST, you pay a 3% GST on thegold value, 5% on making charges, and 12.5% import duty on 1 gramof gold. Previously, there was 1% sales tax, with no tax on goldmaking charges or GST on the gold value.
Why is there a 3 percent GST ongold?
The 3% GST on gold replaces theearlier 1% VAT and 1% service tax, introduced to discourage goldimports into the country. The higher charges are aimed at reducinggold import dependency.
How to buy gold without GST?
In India, purchasing gold withoutpaying GST is illegal, as GST is mandatory on all gold purchases.Exceptions include gold bought through specific government schemesor sovereign gold bonds, which may be GST-exempt.
What is the price of 1gram goldtoday?
As of April 10, 2025, the goldprices in Chennai are ₹8,560 for 22K gold, ₹9,338 for24K gold, and ₹7,090 for 18K gold, with price increases of₹270, ₹294, and ₹255 respectively.
How much tax do you pay on 1 gramof gold?
Post-GST, the tax on 1 gram of goldincludes a 3% GST on the gold value, 5% GST on making charges, and12.5% import duty. Previously, there was 1% sales tax and no GST onthe gold value.
What are making charges ongold?
Making charges on gold range from 3%to 25%, depending on the value of the gold. Wastage chargestypically range from 5% to 7%. These charges are negotiable, andsimple designs tend to have lower making charges.
How do you calculate gold makingcharges?
To calculate gold making charges,determine the current market price of gold, the weight of thejewelry, and the making charge (either a fixed amount per gram or apercentage of the gold's value). Add the making charges to thegold's value and GST to get the final price.
Does gold have 12% GST?
No, gold does not have 12% GST. TheGST rate on gold is 3%, and 5% applies only to the making chargesfor jewellery.
Is gold GST exempt?
No, gold is not GST-exempt. A 3% GSTis applied to gold purchases, and an additional 5% GST is chargedon jewellery making charges.
The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.
