Gold has long been an integral part of Indian culture, symbolizing wealth, tradition, and investment security. However, with the implementation of the Goods and Services Tax (GST) in 2017, the taxation on gold purchases, including gold coins, bars, and biscuits, underwent significant changes. Understanding the GST on gold is crucial for buyers, investors, and jewellers alike.
Gold Rates increase day by day in India, So every people want to know the Gold rate today in India, how much impact of GST on gold, and what will be price of Gold after GST.
GST Rates on Gold Purchases in India
As per the current GST framework, the GST on gold jewellery purchases in India is:
- 3% GST on the value of the gold (applicable to all gold purchases, including jewellery, coins, and bars).
- 5% GST on the making charges of jewellery.
For example, if you purchase gold jewellery worth ₹100,000 with making charges of ₹10,000the GST calculation would be:
- GST on gold value (3%): ₹1,00,000 × 3% = ₹3,000
- GST on making charges (5%): ₹10,000 × 5% = ₹500
- Total GST payable: ₹3,500
This standardized GST structure has replaced multiple indirect taxes such as VAT, excise duty, and octroi, making the tax system more transparent.
GST on Different Forms of Gold
1. GST on Gold Coins and Bars
- Gold coins and bars attract 3% GST on their total value.
- This rate applies regardless of whether they are 22-carat or 24-carat gold.
2. GST on Gold Biscuits
- Similar to coins and bars, gold biscuits also attract 3% GST on their total value.
3. GST on Gold Jewellery
- Gold jewellery (both hallmarked and non-hallmarked) is taxed at 3% GST on its value.
- Making charges for jewellery are taxed separately at 5% GST.
Impact of GST on Gold Prices in India
With the introduction of GST on gold, the taxation process became more structured, replacing the older system of multiple indirect taxes. Let’s examine how GST has affected gold prices:
Pre-GST vs. Post-GST Gold Rates: A Comparative Analysis
| Particulars | Pre-GST Era | Post-GST Era |
| Base Price (per 10 grams) | ₹30,000 | ₹30,000 |
| Customs Duty (10%) | ₹3,000 | ₹3,000 |
| Excise Duty (1%) | ₹300 | Nil |
| VAT (1.2%) | ₹360 | Nil |
| GST Rate on Gold (3%) | Nil | ₹990 |
| Total Price | ₹33,660 | ₹33,990 |
Observations:
- Before GST, gold was taxed through excise duty and VAT, leading to price variations across states.
- After GST, a uniform 3% tax replaced multiple levies, bringing transparency to gold pricing.
- Gold prices saw a slight increase, but the structured taxation system benefited buyers in the long run.
GST on Different Purity Levels of Gold
The GST on gold jewellery remains the same regardless of purity, but understanding gold purity is essential:
- 24-Carat Gold (99.9% pure) – 3% GST on total value.
- 22-Carat Gold (91.6% pure, used in jewellery) – 3% GST on total value + 5% GST on making charges.
- 18-Carat Gold (75% pure, used in designer jewellery) – 3% GST on total value + 5% GST on making charges.
GST on Luxurious Goods: Gold, Silver, and Diamonds
Under the GST system, gold, silver, and diamonds are classified as luxurious goods and taxed as follows:
- Gold: 3% GST on value + 5% on making charges.
- Silver: 3% GST on value + 5% on making charges.
- Diamonds: 0.25% GST on rough diamonds; higher GST rates apply to polished diamonds and diamond jewellery.
Can I Buy Gold Without GST? (Exemptions)
There are no GST exemptions for purchasing physical gold. However, certain investment options allow investors to avoid GST:
- Sovereign Gold Bonds (SGBs) – Issued by the government, these bonds do not attract GST and provide interest returns.
- Digital Gold & Gold ETFs – These are electronic investments in gold that are not subject to GST on purchase.
Tip: Investors looking to avoid GST on gold should explore these non-physical gold investment options.
GST on Gold Rate in 2025: Any Expected Changes?
As of 2025, the GST on gold remains at 3%. However, the government may revise rates based on economic conditions. Possible changes include:
- Increased GST rates for luxury items (including gold) due to rising demand.
- Reduction in making charges GST to boost the jewellery industry.
How to Calculate GST on Gold Purchases?
Let’s take an example of a 22-carat gold purchase:
- Gold Price (10 grams at ₹5,000 per gram): ₹50,000
- Making Charges: ₹5,000
- GST on Gold (3%): ₹50,000 × 3% = ₹1,500
- GST on Making Charges (5%): ₹5,000 × 5% = ₹250
- Total GST Payable: ₹1,750
- Final Cost: ₹56,750
Final Thoughts
The GST on gold purchases has streamlined taxation, making it easier for buyers and sellers. Although it has slightly increased gold prices, it has eliminated multiple indirect taxes, ensuring greater transparency in the gold market. Investors should explore SGBs and digital gold to avoid GST while benefiting from gold’s long-term value appreciation.
Understanding GST on gold jewellery, coins, and biscuits can be complex, but KcorpTax ensures hassle-free compliance for buyers and sellers. Whether it’s the GST rate on 18K, 22K, or 24K gold, exemptions, or tax-saving opportunities, we provide expert guidance to keep you compliant while optimizing your costs. Our team ensures accurate filings, seamless tax structuring, and up-to-date knowledge of regulatory changes.
NOTE- If you need any help you can consult a reputed consultant of GST Registration Online!
FAQs
1. What is the GST rate on gold jewellery?
The GST on gold jewellery is 3% on the gold value and 5% on making charges.
2. Does gold coin purchase attract GST?
Yes, gold coins attract 3% GST, similar to bars and biscuits.
3. Is there any GST exemption for gold purchases?
No, physical gold is not exempt from GST. However, Sovereign Gold Bonds (SGBs) and Gold ETFs do not attract GST.
4. How does GST impact gold prices in India?
GST replaced multiple taxes, leading to greater transparency in gold pricing. However, it marginally increased gold prices.
5. What is the GST rate on 18-carat gold jewellery?
3% GST on value + 5% GST on making charges.
6. Can I buy gold bars without GST?
No, gold bars are subject to 3% GST.
7. Does digital gold attract GST?
No, digital gold does not attract GST on purchase, but selling it may involve capital gains tax.
8. Will GST on gold increase in 2025?
As of now, GST remains at 3%, but future revisions may occur.
9. What is the GST on gold biscuits?
Gold biscuits attract 3% GST, similar to gold coins and bars.
10. Is there GST on gold resale?
Yes, reselling gold attracts GST if sold by a registered dealer.
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