GST on Gold in India

Gold remains one of the most preferred purchases in India for jewellery as well as investment purposes. When purchasing gold, buyers should also consider the applicable GST charges added to the final price.

A 3% GST is charged on the value of gold, while gold jewellery also attracts 5% GST on making charges. These taxes apply to different forms of gold, including jewellery, coins, bars, and digital gold, making it important to understand the overall pricing structure before purchase.

Key Takeaways

●       A 3% GST is charged on the purchase value of gold in India.

●       Gold jewellery includes an additional 5% GST on making charges.

●       Gold ETFs and Sovereign Gold Bonds do not attract GST.

●       Registered gold businesses can claim Input Tax Credit under the GST rules.

Latest Update in GST on Gold in India

Following a government notification in May 2026, the import duty on gold was sharply increased. The revised structure includes a Basic Customs Duty (BCD) of 10% and an Agriculture Infrastructure and Development Cess (AIDC) of 5%, bringing the effective customs duty on gold imports back to 15%

In the Union Budget 2024–25, the Government of India reduced the import duty on gold to make imports cheaper and support the domestic market. The revised import duty structure on gold includes:

1. Basic Customs Duty (BCD): 5%

2. Agriculture Infrastructure and Development Cess (AIDC): 1%

3. Social Welfare Surcharge (SWS): 10% levied on the BCD amount

After including the applicable surcharge, the effective customs duty on gold imports comes to approximately 6.5%.

The reduction in import duty helped lower the overall cost of imported gold in the Indian market. However, the following GST rates on gold continue to apply:

●       3% GST applies to the value of gold across jewellery, coins, bars, and digital gold.

●       5% GST on jewellery making charges

Additionally, Gold ETFs and Sovereign Gold Bonds (SGBs) remain GST‑free.

Note: Capital gains tax treatment of SGBs is governed by income tax rules, not GST, and should be verified against the latest Finance Act before investing

What is GST on Gold in India?

GST on gold is the tax applied on the purchase of gold products in India, including gold jewellery, coins, bars, and digital gold. At present, a 3% GST is charged on the value of gold, which is equally divided into 1.5% CGST and 1.5% SGST.

In the case of gold jewellery, buyers are also required to pay an additional 5% GST on the making charges charged by the jeweller. These taxes directly affect the final purchase price and are important to consider before buying gold for personal use or investment purposes.

Also Read About:  What is Goods and Services Tax (GST)?

Impact of GST on Gold

Gold has traditionally been used as an investment product, in addition to its ornamental value. Gold can be purchased in different forms, such as coins, jewellery, digital gold, Sovereign Gold Bonds, and Gold ETFs. Here is how different gold items and allied products are impacted by the GST.

GST on Gold Coins

Gold coins are commonly purchased for gifting and investment purposes due to their easy resale value. The GST on gold coins is 3%, and no additional taxes or making charges are imposed.

GST on Gold Bars

Gold bars, also called ingots, are available in different sizes and are mainly purchased for investment purposes. Gold bars are available in various sizes and weights and are typically purchased as a long-term investment. The GST on gold bars is 3%, and there are no additional taxes or making charges.

GST on Gold Jewellery

Gold jewellery is the ornaments made of gold that are prepared and designed by trained craftsmen. It can be a gold ring, a necklace, a bracelet, or a chain. The GST on gold jewellery is 3% of the intrinsic value of gold and an additional 5% on the jewellery’s making charges. The making charges vary based on the complexity of the design, jeweller’s brand, and the type of jewellery.

GST on Digital Gold

Digital gold allows buyers to invest in gold online without physically storing it, while the equivalent quantity of gold is stored securely on their behalf.  The purchase of digital gold attracts 3% GST on the value of gold. Additionally, any storage, insurance, and trustee fees associated with digital gold are subject to 3% GST.

GST on Sovereign Gold Bonds

Sovereign gold bonds are government securities denominated in grams of gold issued by the Reserve Bank of India, on behalf of the government of India. It is an investment product for which an investor has to buy in cash and redeem in cash. There is no GST on the purchase of Sovereign Gold Bonds.

GST on Gold ETFs

A gold ETF is an investment product that invests in gold bullion, providing an opportunity to invest in stocks that track the price of gold. There is no GST on the buying or selling of Gold ETFs. However, GST at 18% is applicable on fund management fees (expense ratio), which is indirectly borne by investors.

Import of Gold

Imported gold in India is subject to customs duty along with applicable GST charges. These taxes are added to the import value of gold and directly impact its market price in the country. Changes in import duties can also influence domestic gold rates, making imported gold more or less expensive for buyers and jewellers.

Gold HSN Code

Gold products in India are classified under Chapter 71 of the HSN system used for GST purposes. Different gold items, including jewellery, coins, and bars, may have separate HSN codes depending on their category and usage. These codes help in proper tax classification, billing, and GST compliance for gold-related transactions.

GST Calculation on Gold

Here is how Gold GST in India is calculated on gold purchase:

Availability of Input Tax Credits for GST on Gold Business

Registered gold jewellers and traders can claim Input Tax Credit (ITC) on GST paid for business-related purchases, subject to conditions. However, ITC is not available for gold purchased for personal use or for goods given as gifts, as per Section 17(5) of the CGST Act. This includes GST paid on raw gold, jewellery manufacturing, and job work services. ITC helps reduce the overall tax burden by allowing businesses to adjust the tax already paid against their final GST liability.

Popular Advance Rulings on GST on Gold under GST

Karnataka AAR in the case of Attica Gold Pvt. Ltd.

Matter/Issue:

The case discussed GST applicability on second-hand gold jewellery purchased from unregistered individuals and later sold without major changes.

●      Valuation: Whether GST should apply only to the margin amount between the purchase price and the selling price.

●      ITC Claim: Whether Input Tax Credit can be claimed on such purchases.

Ruling:

●      Valuation: GST was held applicable only on the margin value if the resale value is higher than the purchase price.

●      ITC Claim: ITC is not available when second-hand gold jewellery is purchased under the margin scheme (i.e., from unregistered individuals). ITC can be claimed on purchases from registered dealers, provided the margin scheme is not applied.

Read More About : How to Invest in Gold?

Penalty for GST Non-Compliance

As a trader or jeweller, you are responsible for collecting GST and depositing it with the concerned GST authorities within the prescribed time. The GST system includes different penalties for non-compliance with GST rules and regulations.

A trader or jeweller can face a penalty for offences like selling gold without an invoice or against a false or wrong invoice, and failure to submit the collected GST within the stipulated time. Here are some offences and the penalties in case of non-compliance with GST on gold.

Tips for Buying Gold

1. You should check the purity of gold, which is measured in karats (K). 24K (99.9% purity) is the gold of highest purity, while gold is also available in 22K (91.67% purity), 18K (75% purity), 14K (58.33% purity), and 10K (41.67% purity).

2. When buying jewellery, you will have to pay making charges, which vary depending on the complexity of the design and the seller’s brand value.

3. You should prefer buying hallmarked gold, which is a recognised certification of purity and authenticity.

4. Gold prices can change daily and may vary across cities, so it is important to check local prices before buying.

Read More About : How to Buy Gold Online?

Conclusion

Gold prices in India are influenced not only by the market rate of gold but also by applicable taxes and additional charges. Buyers are required to pay 3% GST on the value of gold, while gold jewellery also attracts 5% GST on making charges. These charges directly affect the final purchase amount for jewellery, coins, bars, and other gold products.

Before purchasing gold, buyers should carefully check the purity, hallmark certification, invoice details, and GST breakup mentioned on the bill. Understanding these components can help buyers make better purchasing decisions and avoid confusion regarding the final price paid for gold.

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