GST on Gold & Jewellery India 2025: Rates, HSN Codes, Making Charges & ITC Rules
India holds an estimated 25,000 tonnes of gold — roughly 11% of the world's total above-ground gold stock. For a country where gold is a cultural staple, a savings instrument, and a generational heirloom, understanding exactly how GST applies to gold purchases is essential.
- Gold attracts a two-part GST structure: 3% on the gold metal value, plus 5% on making charges.
- The 3% rate applies regardless of carat purity (18K, 22K, 24K) or form (jewellery, coins, bars).
- GST 2.0 reforms (September 2025) kept gold's 3% rate unchanged, unlike most other goods which moved to a simplified two-slab structure.
- Buying old gold from an unregistered individual means no GST for the seller; reselling it under the margin scheme taxes only the profit margin at 3%.
- Total effective tax on imported gold is now about 9% (5% BCD + 1% AIDC + 3% IGST), down from ~15% earlier.
- Jewellers can claim ITC on raw gold and job work, but not on GST paid on making charges for retail sales (except a special 2% benefit for exporters).
The good news: even after the sweeping GST 2.0 reforms of September 2025, gold's GST rate is unchanged. The GST Council deliberately kept gold's unique 3% slab intact, recognising its cultural and financial significance to millions of households and small jewellers.
But while the headline rate is simple — 3% on gold, 5% on making charges — the full picture for buyers, investors, and jewellers is more nuanced. This guide covers everything.
What Is the GST Rate on Gold and Jewellery?
Every gold jewellery purchase in India has two separate GST components:
| Component | GST Rate | Applied On |
|---|---|---|
| Gold metal value | 3% | Value of gold content only |
| Making charges | 5% | Labour/craftsmanship charges |
This two-part structure applies regardless of:
- Carat purity (18K, 22K, 24K — same rate)
- Form (jewellery, coins, bars, ornaments)
- Buyer type (individual, business)
GST Rates Across All Gold Product Types
| Product | HSN Code | GST Rate |
|---|---|---|
| Raw gold (unwrought — bars, ingots) | 7108 12 00 | 3% |
| Gold powder | 7108 11 00 | 3% |
| Semi-manufactured gold | 7108 13 00 | 3% |
| Gold jewellery (all types) | 7113 | 3% + 5% on making charges |
| Gold coins (investment grade) | 7108 | 3% |
| Gold medallions | 7113 | 3% |
| Gold-plated base metal | 7109 00 00 | 3% |
| Digital gold (purchase value + storage + trustee fee) | — | 3% |
| Second-hand gold (margin scheme, see below) | 7113 | 3% on margin only |
| Cut and polished diamonds | 7102 | 0.25% (separate, unchanged) |
How to Calculate GST on a Gold Jewellery Purchase
Method 1 — Separate Invoice (Recommended by CBIC)
Most transparent method: gold value and making charges are invoiced separately.
Example:
- Gold chain — gold value: ₹1,00,000
- Making charges: ₹10,000
| Component | Amount | GST Rate | GST Amount |
|---|---|---|---|
| Gold value | ₹1,00,000 | 3% | ₹3,000 |
| Making charges | ₹10,000 | 5% | ₹500 |
| Total | ₹1,10,000 | — | ₹3,500 |
| Final price | ₹1,13,500 |
Method 2 — Composite Invoice (Single Amount)
Sometimes, jewellers issue a single invoice without separating gold and making charges. In that case, the entire transaction is treated as a composite supply, and 3% GST is applied on the total value.
Example:
- Total invoice: ₹1,10,000 (gold + making combined)
- GST: 3% × ₹1,10,000 = ₹3,300
- Final price: ₹1,13,300
Both methods are legal, but Method 1 is recommended — it shows you exactly what you're paying for each component.
GST on Different Forms of Gold Investment
| Investment Type | GST Applicable? | Rate | Notes |
|---|---|---|---|
| Physical gold (bars, coins) | Yes | 3% | No making charges |
| Physical jewellery | Yes | 3% + 5% making | Calculated as above |
| Digital gold (fintech apps) | Yes | 3% | Digital gold attracts 3% GST, while Gold ETFs, Sovereign Gold Bonds, and gold mutual funds are not taxed on the gold itself, only on related service fees at 18%. |
| Gold ETFs | No (on gold) | 18% on fund management fees | No GST on the gold value itself |
| Sovereign Gold Bonds (SGBs) | No | — | Completely exempt |
| Gold Mutual Funds | No (on gold) | 18% on management fees | |
| Hallmarking fee | Yes | 18% | The small hallmarking fee, usually between Rs. 200 and Rs. 500, is treated as a service and attracts 18% GST. |
GST on Gold Imports
Importing gold into India involves multiple layers of tax:
| Duty/Tax | Rate | Notes |
|---|---|---|
| Basic Customs Duty (BCD) | 5% | Reduced from 12.5% in Budget 2024-25 |
| Agriculture Infrastructure Development Cess (AIDC) | 1% | Applied on assessable value |
| IGST (on gold import) | 3% | Applied on value + BCD + AIDC |
| Total effective tax on import | ~9% | Down from ~15% previously |
GST on gold exports: Gold supplied for export purposes is zero-rated — no GST, and exporters can claim ITC on inputs used.
ITC Rules for Jewellers and Gold Businesses
What Jewellers CAN Claim as ITC
Jewellers and gold merchants are eligible to claim Input Tax Credit (ITC) on the GST paid for raw materials used in their business, such as gold, as well as for job work charges incurred. Additionally, if a gold merchant pays tax on a reverse charge basis for supplies received from an unregistered job worker, they can still claim ITC on the tax paid.
Specifically, ITC is available on:
- Raw gold purchases from registered suppliers
- Job work charges (from registered artisans)
- RCM GST paid on purchases from unregistered artisans (5% under RCM)
- Business inputs — packaging, machinery, store fixtures
What Jewellers CANNOT Claim as ITC
ITC cannot be applied to the GST paid on the making charges associated with crafting gold jewellery.
Additionally:
- ITC is not allowed on gold coins given as promotional gifts or sales incentives.
- Buyers purchasing gold for personal use cannot claim ITC under any circumstances.
Special ITC for Exporters
Registered jewellers can claim a 2% ITC on the 5% GST charged on making charges for gold jewellery. However, this benefit applies only to exporters and not to domestic buyers.
GST on Second-Hand Gold: The Margin Scheme
This is the area most guides get wrong. When a jeweller buys old gold from an unregistered individual (e.g., a housewife selling her old necklace), special rules apply:
The Margin Scheme (Rule 32(5) of CGST Rules)
- GST is payable only on the profit margin — the difference between selling price and purchase price
- If selling price < purchase price → no GST
- ITC cannot be claimed under the margin scheme
Jeweller buys old gold necklace from unregistered individual for ₹50,000
Jeweller sells it (as-is) to another customer for ₹58,000
Margin = ₹58,000 − ₹50,000 = ₹8,000
GST = 3% × ₹8,000 = ₹240 (not 3% of ₹58,000 = ₹1,740)
Gold Exchange (Old for New)
No, GST is not applicable when you exchange old gold jewelry for new ones. Such transactions are considered as a supply of goods and are not subject to GST on the old gold value. The buyer pays GST only on the new jewellery's value (net of the exchange credit).
E-Way Bill for Gold Transport
For gold movements worth Rs. 2 lakh or more within a state, an e-way bill is required. For interstate movement, the regular ₹50,000 threshold applies — but since gold is high-value, most movements will trigger the requirement.
Previously, gold was exempt from e-way bill requirements. This exemption was removed in September 2022, and all gold transporters must now comply. See our E-Way Bill Guide for generation steps.
GST Compliance for Jewellers: Checklist
Running a jewellery business? Your GST obligations:
Register for GST if turnover > ₹40 lakh (goods threshold)
Issue detailed invoices showing gold value and making charges separately
Collect and remit 3% GST on gold value, 5% on making charges
Pay RCM at 5% on making charges from unregistered artisans
File GSTR-1 by 11th (monthly) or 13th (quarterly) — report all gold sales
File GSTR-3B and pay net GST after ITC offset
Generate e-way bill for gold shipments above ₹2 lakh (intrastate) or ₹50,000 (interstate)
Comply with BIS hallmarking norms (mandatory for 14K, 18K, 22K gold jewellery)
GST on Gold — Frequently Asked Questions
Does the GST rate differ for 18K, 22K, and 24K gold?
No, the GST rate remains the same at 3% for all purities of gold, including 18K, 22K, and 24K.
Is GST applicable when I sell my old gold?
If you're an unregistered individual, no GST is payable on your sale. GST applies only when a registered dealer sells.
Is there GST on gold during festivals like Dhanteras?
Yes — GST applies uniformly regardless of when you buy. There are no festival exemptions.
Can I claim GST on gold purchased as a business asset?
Yes, if you're a registered business purchasing gold for business purposes (e.g., as collateral, for awards), you can claim ITC on the 3% GST paid.
What is the customs duty on gold jewellery import from foreign countries?
In the Union Budget 2025, the customs tariff on jewellery and parts thereof (HSN code 7113) was reduced from 25% to 20%, effective from February 2, 2025.
External References
CBIC GST Rate Notification on Gold — official rate classification
GST Portal — HSN rate finder for gold and jewellery
Bureau of Indian Standards — Gold Hallmarking — mandatory hallmarking rules
Conclusion
For buyers, the GST math on gold is straightforward:
- 3% on the gold value (verify this is applied correctly on your invoice)
- 5% on making charges (ask for a separate line item)
- No GST on old gold exchange — the exchange value is deducted before GST applies
Always insist on a detailed invoice from your jeweller showing both components separately. Use gstcalculator.me to verify the GST breakdown before making any significant gold purchase.
For jewellers, the ITC chain — from raw gold purchases to job work to retail sale — is where tax efficiency lies. Maintain proper records of all RCM payments and ensure you're filing GSTR-1 and GSTR-3B accurately every period.
Related: New GST Rate Slab List 2025–26 · HSN Code List India 2025 · E-Way Bill GST India 2025 · Input Tax Credit Under GST
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