New GST on Diamonds in India: What You Should Know Before Buying
Diamonds are a symbol of luxury, beauty, and wealth. Whether you’re buying them for investment or adornment, understanding the taxes involved is crucial—especially under the Goods and Services Tax (GST) system. In this blog, we explore the GST on diamonds, applicable HSN codes, tax rates, and how it affects both buyers and businesses in India.
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New GST Rate on Diamonds
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for pencils and closely related items (no compensation cess).
| Diamond Type | New GST Rate |
|---|---|
| Rough diamonds | 0.25% |
| Cut & polished diamonds (loose) | 1.5% |
Note: The 1.5% rate on cut & polished diamonds has applied since 18 Jul 2022 (post 47th GST Council). Rough diamonds remain at 0.25%.
| Product Description | HSN Code | New GST Rate |
|---|---|---|
| Rough diamonds | 7102 | 0.25% |
| Cut & polished diamonds (loose, not mounted/set) | 7102 | 1.5% |
Classify loose diamonds (worked or not, but not mounted or set) under HSN 7102. Jewellery/articles are classified separately under Chapter 71.
New GST on Diamond Jewellery & Making
| Product/Service | HSN/SAC | New GST Rate | Remarks |
|---|---|---|---|
| Diamond jewellery (articles of precious metal studded with diamonds) | HSN 7113 | 3% | Retail supply of finished jewellery |
| Jewellery “making charges” when part of the retail invoice | HSN 7113 | 3% | Forms part of the composite supply of jewellery |
| Job work in relation to diamonds (cutting/polishing) billed to a registered person | SAC 9988 | 1.5% | Manufacturing services on physical inputs (diamonds) owned by others |
Tip: If “making” is billed on the same invoice as jewellery, it follows the jewellery’s 3% rate as a composite supply. Separate job work services in relation to diamonds supplied to a registered principal are taxed at 1.5%.
Old GST Rate on Diamonds
(Old GST Rates – Applicable Until 21st September)
As of 2025, rough and polished diamonds are taxed under two different slabs:
| Diamond Type | GST Rate |
|---|---|
| Rough Diamonds | 0.25% |
| Electric Bikes/Scooters | 1.5% |
This low GST structure is designed to support India’s gem and jewellery export industry while keeping pricing transparent for domestic buyers.
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HSN Code for Diamonds
Diamonds fall under HSN Code 7102 , which includes rough, industrial, and cut or polished diamonds.
| Product Description | HSN Code | GST Rate |
|---|---|---|
| Rough Diamonds | 7102 | 0.25% |
| Polished / Cut Diamonds | 7102 | 1.5% |
These HSN codes are crucial for traders and retailers when issuing GST invoices and filing returns.
Old GST Calculation on Diamonds
Let’s say you’re buying a polished diamond worth ₹5,00,000:
- GST @1.5% = ₹7,500
- Total Price = ₹5,07,500
For a rough diamond worth ₹10,00,000:
- GST @0.25% = ₹2,500
- Total Price = ₹10,02,500
These are relatively lower tax amounts compared to luxury goods like gold (3%) or high-end electronics (18–28%).
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Old GST on Diamond Jewellery
Jewellery that contains diamonds falls under a different category altogether:
| Product Type | GST Rate |
|---|---|
| Diamond Jewellery | 3% |
| Making Charges (if billed separately) | 5% |
So if you’re buying a diamond ring with a value of ₹1,00,000:
- GST @3% = ₹3,000 (on the ring)
- GST @5% = ₹500 (on ₹10,000 making charges)
- Total GST = ₹3,500
Secondary Keyword Highlights:
- The gst on diamond rate is significantly lower than on gold or other luxury items.
- Diamond gst rate for polished stones is currently at 1.5%, making it favorable for buyers and traders.
- If you’re wondering what is the gst on diamonds, it depends on whether the diamond is rough (0.25%) or polished (1.5%).
- For exporters, the gst on diamond exports can be claimed as a refund under the zero-rated supply provisions.
Input Tax Credit (ITC) on Diamonds
For Businesses:
If you’re a jewellery manufacturer or diamond trader:
- You can claim Input Tax Credit on GST paid during purchase.
- This ITC can be adjusted against your output tax liability during sale.
For Consumers:
You cannot claim ITC as an individual buyer. The tax becomes part of your purchase cost.
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GST on Import and Export of Diamonds
- Imports: Attract Basic Customs Duty (BCD) + IGST at applicable rates (0.25% or 1.5%)
- Exports: Treated as zero-rated supplies. Exporters can claim GST refunds under LUT (Letter of Undertaking)
This helps exporters remain competitive in the global diamond market.
Final Thoughts
Understanding the gst on diamond purchases helps buyers make smarter investments and ensures businesses maintain compliance. With the relatively low diamond gst rate, India continues to support its thriving gem and jewellery sector while keeping taxation transparent and consistent.
I am a Chartered Accountant with 5 years of experience specializing in GST, income tax, and HSN code classification. I help businesses with GST compliance, tax planning, and financial advisory, ensuring they meet regulatory requirements while optimizing their tax strategies. I aim to simplify GST filings, income tax laws, and HSN code classifications, helping professionals and business owners stay informed and compliant.
Frequently Asked Questions
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What is the GST on rough diamonds?Rough diamonds are taxed at just 0.25% under GST.
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How much GST is charged on polished or cut diamonds?1.5% GST is applicable on polished or cut diamonds.
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Is GST applicable on diamond jewellery?Yes, jewellery made with diamonds is taxed at 3% GST, plus 5% on making charges if separately billed.
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Can diamond traders claim Input Tax Credit?Yes, registered businesses can claim ITC on GST paid on raw materials and supplies.
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What is the HSN code for diamonds?The HSN code for both rough and polished diamonds is 7102.
