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 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:

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 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 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 , not the same as a finished jewellery sale to a retail customer.

Invoice Calculation Example

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 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 . 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 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:

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 . 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 .

GST on Physical Gold, Digital Gold and Gold Investment Products

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:

Example:

ITC Rules for Jewellers and Gold Businesses

Registered jewelers can claim 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 . 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 , 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.

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 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 , delivery challan, job work challan, transport details, and internal approval records.

Things to Check Before Buying Gold Jewelry

Check BIS hallmarking

BIS hallmarking 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 , 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 . 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 and casual treatment of job work or old gold transactions.