Gold is one of the most loved and purchased items in India—whether for weddings, festivals, or investments.
But do you know how GST (Goods and Services Tax) affects the price of gold?
Let’s break it down simply.
What is the GST Rate on Gold in India?
When you buy gold jewellery or coins, GST is charged in two parts:
- Gold value – 3% GST
- Making charges – 5% GST (if separately mentioned)
So, total GST can be more than 3% depending on how making charges are billed.
Example of GST on Gold
You buy a gold ring worth ₹50,000
- 3% GST on gold value = ₹1,500
- Making charge = ₹5,000
- 5% GST on making = ₹250
- Total GST = ₹1,500 + ₹250 = ₹1,750
- Final price = ₹50,000 + ₹5,000 + ₹1,750 = ₹56,750
GST on Gold Imports
When gold is imported into India:
- Import duty = Around 10% (can vary)
- Agriculture Infrastructure Cess = 2.5%
- Then 3% GST is added on top of these costs
This makes imported gold more expensive, affecting local prices.
Effects of GST on Gold Buyers
More Transparent Pricing – You can clearly see how much tax you’re paying
Standard Tax Rate Across India – Earlier, VAT varied by state
Slightly Higher Prices – Total tax burden may feel more than before
Making Charges Add More GST – Especially if charged separately
Effects on Gold Sellers and Jewellers
- Need to maintain proper GST invoices and returns
- Input tax credit (ITC) not available for consumers
- Need GST registration if turnover exceeds ₹40 lakh (₹20 lakh in some states)
Before vs After GST on Gold
| Aspect | Before GST | After GST |
|---|---|---|
| VAT (State) | ~1% | — |
| Excise Duty | ~1% | — |
| Service Tax | ~1.5% | — |
| Total Tax | ~3%+ | 3% GST + 5% on making charges |
So overall tax has remained similar, but it is more structured and visible now.
