---
title: "GST on Gold: Rate, Making Charges, Exemptions & ITC"
description: "Learn GST on gold, GST on making charges, GST calculation on gold, impact of GST on gold, GST exemptions, e-way bill rules, and ITC for GST on gold business."
canonical: "https://busy.in/gst/the-impact-of-gst-on-gold-and-gold-jewellery/"
author: "Nishant"
published: "2023-04-07T11:05:23.000Z"
category: "GST"
---

-   GST on gold, gold bars, coins and gold jewellery is generally 3%.
-   For retail jewellery sales, GST is charged at 3% on the total transaction value (gold + making charges combined). A separate 5% applies only in business-to-business job work - not on your jewellery invoice.
-   Gold and jewellery fall under Chapter 71 of the GST rate schedule, with common HSN codes such as 7108 for gold and 7113 for jewellery.
-   Import duty on gold was increased from 6% to 15% as of 13 May 2026, affecting the landed cost of imported gold.
-   If an individual sells old gold jewellery to a jeweller, GST is not charged by the individual because they are not a GST-registered supplier.
-   Sovereign Gold Bonds and Gold ETFs are securities, so buying or selling the units does not attract GST.
-   Gold loan interest is exempt from GST, but processing fees, valuation fees and other service charges can attract GST.
-   Jewellers can claim ITC on eligible business purchases, but ITC is blocked on gold bought for gifts, free samples or promotional distribution.

This guide explains how GST applies to gold purchases, jewellery making charges, imports, old gold, gold loans, gold investment products and jeweller compliance.

# GST on Gold and Gold Jewellery in India

## **GST Rate on Gold and Gold Jewellery**

The official CBIC GST rate schedule lists gold at 1.5% CGST and 1.5% SGST, for a total of 3%. The GST rate does not change only because the gold is 18K, 22K or 24K. For buyers, this means GST is part of the final jewelry bill. [**HSN codes**](https://busy.in/hsn/) help classify gold products correctly on invoices and GST returns.
For registered jewelers, correct classification is important because the wrong HSN code or rate can create issues during GST return filing, reconciliation, and departmental checks. Check the common HSN codes and GST rates for different items below:

| 7108 | Gold, including gold plated with platinum, unwrought, semi-manufactured or in powder form | 3% |
| --- | --- | --- |
| 7113 | Articles of jewellery and parts of jewellery, made of precious metal | 3% |
| 7114 | Articles of goldsmiths’ or silversmiths’ wares and parts thereof | 3% |
| 7115 | Other articles of precious metal or metal clad with precious metal | 3% |
| 7118 | Coins | 3% |

## **GST on Jewellery Making Charges**

For retail sales of finished gold jewellery to a customer, GST is payable at 3% on the [**total transaction value**](https://busy.in/gst/value-of-supply-under-gst/) of the jewellery. This means GST is calculated on the combined value of gold, making charges and other taxable components that form part of the jewellery invoice.

The 5% GST rate does not apply simply because making charges are shown separately on the customer invoice. As clarified by the GST Council, GST remains payable at [**3% on the total jewellery**](https://busy.in/gst-rates/gold/) value, whether making charges are itemised separately or included in the price.

However, a separate 5% GST rate can apply in a job work transaction. For example, if a jewellery manufacturer gives gold as raw material to a third-party job worker or artisan and the job worker returns finished jewellery, the registered job worker charges GST at 5% on the job work charges only. This is a business-to-business [**job work transaction**](https://busy.in/gst/all-about-input-tax-credit-on-job-work/) , not the same as a finished jewellery sale to a retail customer.

**Invoice Calculation Example**

| Particulars | Amount |
| --- | --- |
| Gold value | ₹1,00,000 |
| Making charges | ₹10,000 |
| Total transaction value | ₹1,10,000 |
| GST at 3% on total transaction value | ₹3,300 |
| Final invoice value | ₹1,13,300 |

**When a jeweler gets job work done**

A different treatment can apply when one business sends gold to another person for job work. For example, if a registered jeweler sends gold to a karigar or job worker to convert it into jewelry, the job worker is providing a manufacturing or job work service.

**Note:** The current CBIC service [**rate schedule**](https://busy.in/gst/gst-2-0-updated-gst-rates-effective-22-sept-2025-what-they-mean-for-your-business/) should be checked carefully, as different entries may apply depending on the nature of the work and the ownership of the goods. For example, CBIC’s rate schedule lists specific job work entries and also a general manufacturing service entry for physical inputs owned by others.

### **When the customer gives old gold to make new jewelry**

If a customer brings their own gold and asks a jeweler or goldsmith to convert it into a new ornament, the jeweler is mainly providing labour or manufacturing service. This should not be treated casually as a normal jewelry sale.

GST rate on such labor or repair work depends on the exact classification of the service and [**invoice structure**](https://busy.in/gst/essential-information-to-be-included-in-gst-invoice/) . In many cases, pure manufacturing service on goods owned by others can attract 18%, but jewelers should verify the correct SAC and rate before billing.

## **Current Import Duty on Gold in India**

From 13 May 2026, India increased import duty on gold and silver from 6% to 15%. The revised structure includes 10% Basic Customs Duty and 5% Agriculture Infrastructure and Development Cess. This affects the landed cost of imported gold. [**GST on imports**](https://busy.in/gst-rates/import-goods/) is levied under IGST, and the final tax impact depends on the import valuation basis. Check the table below for a before-and-after comparison:

| Duty Component | Before 13 May 2026 | From 13 May 2026 |
| --- | --- | --- |
| Basic Customs Duty | 5% | 10% |
| AIDC | 1% | 5% |
| Total customs duty | 6% | 15% |

## **GST on Old Gold and Gold Exchange**

### **Old gold sold by an individual**

If an individual sells old gold jewellery to a jeweller, GST is generally not charged by the individual. The reason is simple: a private individual selling personal jewellery is usually not acting as a [**GST-registered supplier**](https://busy.in/gst/gst-registration-certificate-everything-you-need-to-know/) . The jeweller may later sell the old gold, melted gold or remade jewellery. At that stage, GST can apply depending on how the sale is made.

### **Old gold sold by a registered dealer**

If a registered dealer sells second-hand gold or old jewellery, GST may apply. In some second-hand goods cases, Rule 32(5) of the CGST Rules allows GST to be calculated on the margin, meaning the difference between the selling price and purchase price, subject to conditions. The official GST Council explanation of the margin scheme confirms that where the margin is negative, it is ignored for GST valuation.

**Exchange of old gold for new jewellery**

In an exchange transaction, the customer gives old gold and buys new jewellery. The old gold value is usually adjusted against the price of the new jewellery. This does not make the new jewellery GST-free. GST still applies on the taxable value of the new jewellery sold by the jeweller. The old gold value is only a price adjustment, not a [**GST exemption**](https://busy.in/gst/gst-exemptions-products-services/) .

## **GST on Physical Gold, Digital Gold and Gold Investment Products**

| Product | GST on Purchase or Sale | Practical Note |
| --- | --- | --- |
| Physical gold | 3% | Applies to gold value or transaction value |
| Gold jewellery | 3% | Applies to total jewellery transaction value |
| Digital gold | Generally 3% on gold value | Extra charges need invoice-wise check |
| Gold ETF units | Nil | [**Service charges**](https://busy.in/gst/gst-service-rates-benefits-challenges/) at fund level may include GST |
| Sovereign Gold Bonds | Nil | Treated as securities |
| Gold mutual fund units | Nil on unit purchase or redemption | Expense ratio may include GST on services |

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## **GST on Gold Loans**

A gold loan is a loan taken by pledging gold jewelry or ornaments as collateral. GST is not charged on the loan amount itself. Thus, for borrowers, the key point is that GST usually applies to service charges, not to loan interest. The GST treatment is as follows:

| Gold Loan Component | GST Treatment |
| --- | --- |
| Loan principal | No GST |
| Interest on gold loan | Exempt |
| Processing fee | Taxable, generally 18% |
| Valuation or appraisal fee | Taxable, generally 18% |
| Documentation or service charges | Taxable, generally 18% |
| Storage or safe custody fee, if separately charged | Taxable based on service classification |

Example:

| Particulars | Amount |
| --- | --- |
| Gold loan amount | ₹2,00,000 |
| Monthly interest | ₹1,500 |
| GST on interest | Nil |
| Processing fee | ₹2,000 |
| GST on processing fee at 18% | ₹360 |

## **ITC Rules for Jewellers and Gold Businesses**

Registered jewelers can claim [**Input Tax Credit**](https://busy.in/gst/input-tax-credit/) on eligible business purchases if the conditions under the GST law are satisfied. This may include GST paid on gold purchases, eligible job work, packaging, business services, and other inputs used for taxable outward supplies.

However, ITC is not available in every case. Section 17(5) of the CGST Act blocks ITC on goods disposed of as [**gifts or free samples**](https://busy.in/gst/what-is-blocked-credit-in-gst-a-guide-to-section-175/) . This means a business should not claim ITC on gold coins, jewelry, or gold articles distributed as gifts, rewards or promotional giveaways.

Jewelers should reconcile purchase invoices, [**GSTR-2B**](https://busy.in/gst/what-is-gstr-2b-and-why-is-it-important/) , stock records, and sales invoices regularly. This is especially important because gold has high value, and even small GST mistakes can create large tax exposure.

| Situation | ITC Availability |
| --- | --- |
| Jeweller buys gold for resale or manufacturing taxable jewellery | Generally available, subject to GST conditions |
| Jeweller pays GST on eligible business services | Generally available |
| Gold bought for business gift or promotional distribution | Blocked |
| Gold bought for personal use | Not available |
| Gold used in exempt or non-business supply | Not available or [**subject to reversal**](https://busy.in/gst/reversal-of-input-tax-credit/) |

## **E-way Bill Rules for Gold Movement**

Gold, jewellery, precious metals, and precious stones generally fall under Chapter 71. Under Rule 138(14) of the CGST Rules, specified goods in Chapter 71 are generally exempt from the normal [**e-way bill**](https://busy.in/gst/e-way-bills-the-complete-guide/) requirements. This exemption covers precious metals, precious stones, jewelry, goldsmiths’ wares, and silversmiths’ wares, but it does not cover imitation jewelry under HSN 7117.

However, Notification No. 38/2023-Central Tax inserted Rule 138F, which allows a State or Union Territory Commissioner to mandate e-way bill generation for intra-state movement of specified gold, precious stones, and related Chapter 71 goods. This applies only where the relevant State or Union Territory has issued a notification, and the notified consignment value threshold cannot be below ₹2 lakh.

Therefore, jewelers and gold businesses should check the current State or Union Territory notification before moving high-value gold, jewelry, or precious stones within the state. Even where e-way bill generation is not required, businesses should maintain proper movement documents such as [**tax invoice**](https://busy.in/gst/tax-invoices-in-special-cases-under-gst/) , delivery challan, job work challan, transport details, and internal approval records.

## **Things to Check Before Buying Gold Jewelry**

### **Check BIS hallmarking**

BIS [hallmarking](https://www.bis.gov.in/hallmarking-overview/consumer-protection/?lang=en) helps verify the purity of gold jewelry. As of March 2026, mandatory hallmarking has expanded to 380 districts and covers six caratages: 14K, 18K, 20K, 22K, 23K and 24KS. Buyers can also use the BIS Care app’s Verify HUID feature to check hallmark details.

### **Ask for a proper GST invoice**

The invoice should clearly show the jeweller’s GSTIN, [**invoice number**](https://busy.in/accounting/how-to-create-gst-invoice-in-accounting-software/) , date, gold weight, purity, rate, making charges, taxable value and GST amount. This helps during exchange, resale, insurance claims, and dispute resolution.

### **Do not compare only the gold rate**

Two jewelers may quote the same gold rate but very different making charges, wastage charges or stone charges. The final invoice value matters more than the displayed gold rate.

### **Understand old gold exchange billing**

When you exchange old gold for new jewellery, check how the jeweller has valued the old gold and how GST has been calculated on the new jewellery. The exchange value should not be confused with a GST exemption.

### **Buy from a registered and reliable jeweller**

A registered jeweller is expected to issue a valid GST invoice and maintain proper stock and [**tax records**](https://busy.in/accounting/gst-audit-preparation-using-software/) . This gives buyers better documentation and reduces risk during future resale or exchange.

## **Conclusion**

GST on gold is simple at the headline level, but the details matter. Gold, coins, bars and jewellery generally attract 3% GST, but the treatment changes when the transaction involves old gold, job work, imports, gold loans or investment products.

For a buyer, the most important checks are the final invoice value, hallmarking, making charges and GST shown on the bill. For a jeweller, the bigger risks are wrong classification, outdated import duty assumptions, incorrect [**ITC claims**](https://busy.in/gst/how-to-claim-itc-in-india/) and casual treatment of job work or old gold transactions.

## About the author

**Nishant**

I am a Chartered Accountant with more than five years of experience in the accounting field. My areas of expertise include GST, income tax, and audits. I am passionate about sharing knowledge through blogs and articles, as I believe that learning is a lifelong journey. My goal is to provide valuable insights and simplify financial matters for individuals and business owners alike.

## Frequently asked questions

### What is the GST rate on gold in India?

GST on gold is generally 3%. This applies to gold bars, coins, bullion and gold jewellery classified under Chapter 71 of the GST rate schedule.

### Is GST different for 22K and 24K gold?

No. GST does not change because of purity. Whether the gold is 18K, 22K or 24K, the GST rate remains the same as the general GST rate when sold as gold or gold jewellery.

### Is GST charged separately on making charges?

For normal jewellery sales, making charges form part of the jewellery transaction value and GST is charged at 3% on the total value. Separate rate treatment may apply in job work or labour-only cases.

### Is there GST when I sell old gold to a jeweller?

If you are an individual selling personal old gold jewellery, you generally do not charge GST because you are not acting as a GST-registered supplier.

### Is GST charged when I exchange old gold for new jewellery?

GST applies on the new jewellery purchased from the jeweller. The value of your old gold is adjusted against the price, but it does not make the new jewellery GST-free.

### What is the GST on gold coins?

Gold coins generally attract 3% GST. The same rate applies to gold bars and bullion.

### Is GST applicable on digital gold?

GST generally applies at 3% on the gold value in a digital gold purchase. Extra charges such as delivery, minting, storage or platform fees should be checked from the invoice because they may have a different GST treatment.

### Does GST apply to Gold ETFs?

No GST is charged on buying or selling ETF units. However, GST may be included in fund-level expenses charged by the AMC.

### Do Sovereign Gold Bonds attract GST like physical gold?

No. SGBs are securities, so they do not attract the 3% GST applicable to physical gold.

### Why is GST shown in my gold loan statement if interest is exempt?

GST is not on the loan interest. It is usually charged on lender fees such as processing, valuation, documentation or renewal charges.

### Can jewellers claim ITC on gold purchases?

Registered jewellers can generally claim ITC on eligible gold purchases used for taxable business supplies, subject to GST conditions. ITC is not allowed where gold is bought for gifts, free samples, personal use or blocked purposes.

### What is the current import duty on gold in India?

From 13 May 2026, import duty on gold is 15%, made up of 10% Basic Customs Duty and 5% AIDC. This replaced the earlier 6% duty structure.

### Is hallmarking related to GST?

No. Hallmarking verifies purity, while GST is a tax on supply. Hallmarked and non-hallmarked gold do not get different GST rates because of hallmarking.

### Is e-way bill required for gold jewellery?

Gold and jewellery under Chapter 71 have special treatment under e-way bill rules. Some state-specific requirements can apply for intra-state movement, so jewellers should check the current state notification before moving high-value gold.

### What should a buyer check in a gold jewellery bill?

A buyer should check the jeweller’s GSTIN, gold weight, purity, rate per gram, making charges, taxable value, GST amount, invoice number and hallmark details. This protects the buyer during exchange, resale or dispute.

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