Jewellery HSN Code: Understanding Classification
Jewellery includes ornaments made from gold, silver, platinum, diamonds and imitation materials. Jewellers and traders must use the correct jewellery HSN code so that GST and customs duties are applied properly.
This guide explains the main HSN codes used for gold and diamond jewellery, how these codes affect taxation and why correct classification is important for jewellery businesses.
HSN Code for Gold Jewellery
Gold jewellery is generally classified under heading 7113 which covers articles of jewellery of precious metal. This heading covers items such as rings, chains, bangles, necklaces and other ornaments made mainly from gold or other precious metals.
| HSN Code | Product name | Product description | GST rate |
|---|---|---|---|
| 7113 | Gold jewellery | Rings, chains, bangles, necklaces and other ornaments of gold | 3% |
| 7116 | Imitation jewellery | Fashion jewellery made from base metals, plastic, glass or other imitation materials | 5% or 18% depending on notification |
| 7102 | Diamonds not mounted or set | Loose diamonds used for making jewellery | 0.25% or 3% depending on type |
| 7118 | Coins of precious metal | Gold or silver coins supplied as investment or collectibles | 3% |
| 9988 | Job work services on jewellery | Job work and making services for jewellery manufacture and repair | 5% |
HSN Code for Diamond Jewellery
Diamond jewellery which uses gold or other precious metal as a base and is set with diamonds is normally still classified under heading 7113 as jewellery of precious metal. The presence of diamonds does not change the main heading, but the description on invoices should clearly mention that the jewellery contains diamonds.
Loose diamonds that are not mounted or set are classified separately under heading 7102. These may attract a different GST rate compared to finished diamond jewellery, so it is important not to confuse the two classifications.
How HSN Codes Help in Jewellery Taxation?
Correct jewellery HSN codes help determine the GST rate, customs duties on imports and the eligibility of input tax credit on raw materials and services. For example, gold jewellery sold to customers is taxed differently from loose diamonds imported for manufacturing, even though both belong to the jewellery sector.
When invoices clearly show the correct HSN code for each line item it becomes easier to report sales and purchases in GST returns, answer queries from tax officers and provide accurate information to customers about the tax component of their jewellery purchases.
Conclusion
Jewellery products mainly fall under headings 7113, 7116 and related codes in Chapter 71. Using the correct HSN code for gold jewellery, diamond jewellery, imitation jewellery and related services ensures correct GST and customs treatment. This in turn helps jewellery businesses stay compliant, manage their tax costs and maintain trust with customers.
Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone!
Frequently Asked Questions
-
What is the HSN code for gold jewellery?
Gold jewellery such as rings, bangles, chains and necklaces is usually classified under HSN code 7113 which covers articles of jewellery of precious metal.
-
How is diamond jewellery classified under HSN codes?
Finished diamond jewellery made on a gold or other precious metal base is generally classified under HSN 7113, while loose diamonds not mounted or set are classified under HSN 7102.
-
Why are HSN codes essential for jewellery businesses?
HSN codes decide the GST rate and customs duties on different jewellery products and help in accurate invoicing, stock control and return filing for jewellers and traders.
-
Can the HSN code affect customs duties on jewellery?
Yes. Customs duty is calculated based on the classification of the imported item, so using the correct HSN code for gold jewellery, loose diamonds or imitation jewellery directly affects the duty payable on imports.
-
How do HSN codes impact GST for jewellery purchases?
The HSN code chosen for a jewellery item determines the GST rate applied and how the supply is reported in GST returns. Correct codes help customers see the right tax amount and allow businesses to claim eligible input tax credit on inputs and services.