GST on Gold — Rate on Metal & Making Charges
Updated June 2026 · VerifiedWhat Is the GST Rate on Gold?
The GST rates applicable to gold and gold-related items are:
| Item | HSN Code | GST Rate |
|---|---|---|
| Gold bars / bullion / coins | 7108 | 3% |
| Gold jewellery | 7113 | 3% |
| Gold ornaments (studded with stones) | 7113 | 3% (on gold portion) |
| Making charges (job work) | 9988 | 5% |
| Silver bars / coins | 7106 | 3% |
| Silver jewellery | 7113 | 3% |
| Platinum bars | 7110 | 3% |
| Rough diamonds | 7102 | 0.25% |
| Cut & polished diamonds | 7102 | 1.5% |
How Is GST Calculated on a Jewellery Purchase?
Example: You buy a gold necklace weighing 20 grams at ₹7,000 per gram with making charges of ₹500 per gram.
| Component | Calculation | Amount |
|---|---|---|
| Gold value | 20g × ₹7,000 | ₹1,40,000 |
| Making charges | 20g × ₹500 | ₹10,000 |
| Sub-total | — | ₹1,50,000 |
| GST on gold (3%) | 3% of ₹1,40,000 | ₹4,200 |
| GST on making charges (5%) | 5% of ₹10,000 | ₹500 |
| Total GST | — | ₹4,700 |
| Total payable | — | ₹1,54,700 |
How Does GST Appear on a Jewellery Bill?
A GST-compliant jewellery bill should show:
- Gold metal value — weight, purity (e.g., 22K, 24K), per-gram rate, and total gold value.
- Making charges — either as a per-gram amount or a percentage of gold value.
- CGST and SGST (for intra-state) or IGST (for inter-state) separately on gold value and making charges.
- Total amount payable including all taxes.
- Jeweller’s GSTIN, invoice number, and HSN codes.
What About GST on Old Gold Exchange?
When you exchange old gold jewellery for new jewellery:
- The jeweller buys your old gold — this is a purchase and does not attract GST from you.
- GST is charged only on the net amount payable (new jewellery value minus old gold value).
- The jeweller must issue a purchase voucher for the old gold received and a tax invoice for the new jewellery sold.
What Is the Historical Background of Gold Taxation?
Before GST (pre-July 2017), gold attracted:
- 1% excise duty (on jewellery manufacturing)
- 1% VAT (varied by state, typically 1-1.2%)
- 10% customs duty on imported gold
Under GST, the excise and VAT were replaced by a unified 3% GST. Customs duty continues to apply separately on imports. The 3% rate was specifically chosen after significant industry consultation to keep gold jewellery affordable while ensuring tax compliance. The making charges were set at 5% (reduced from the standard 18% job work rate) as a concession for the jewellery sector.
Is There Customs Duty on Top of GST?
Yes. Imported gold attracts customs duty (currently 6%) plus Agriculture Infrastructure and Development Cess (AIDC) of 5%. GST at 3% is charged on the landed value (assessable value + customs duty). So the total tax incidence on imported gold is higher than on domestically sourced gold.
Frequently Asked Questions
Is GST applicable on gold coins sold by banks?
Yes. Gold coins sold by banks attract 3% GST on the sale price. Banks charge GST the same way as jewellers. The buyer does not get any ITC unless the coins are purchased for resale or business purposes.
Do I need to pay GST on gold gifted to family?
No GST is applicable when you gift gold jewellery to family members as it is not a supply for consideration. However, if a business entity gifts gold (such as corporate gifts), GST may apply and ITC on such gold would need to be reversed.
What is the GST on gold ETFs and sovereign gold bonds?
Gold ETFs (Exchange Traded Funds) do not attract GST as they are financial securities. Sovereign Gold Bonds (SGBs) issued by the RBI are also exempt from GST. Capital gains tax applies on redemption as per income tax rules.
Can jewellers claim ITC on gold purchased for their business?
Yes. Registered jewellers can claim ITC on GST paid on gold purchases (raw material), making charges received from karigars, and other business expenses, provided all Section 16 conditions are met.
Has the GST rate on gold changed since 2017?
No. The GST rate on gold has remained at 3% since the inception of GST on 01-Jul-2017. The 5% rate on making charges has also remained unchanged. There have been no revisions to these rates by the GST Council as of June 2026.