What is the HSN code for plain silver?

The HSN code for plain silver is 7106, which covers silver in unwrought, semi-manufactured, or powder form. This code is used for taxation under gst on silver and helps ensure uniform classification and correct GST application across India.

What is the HSN code for silver ornaments?

Silver ornaments and jewellery fall under HSN code 7113, which applies to articles of jewellery made of silver. This classification is essential for determining GST applicability, invoicing accuracy, and compliance for jewellers and buyers.

What is the VAT on silver?

VAT on silver is no longer applicable after the introduction of GST. Earlier, VAT rates varied by state, but GST replaced VAT and other indirect taxes with a uniform 3% tax on silver across India.

Can businesses claim an Input Tax Credit (ITC) on the purchase of silver?

Yes, businesses can claim ITC on silver purchases if the silver is used for taxable business activities. Proper tax invoices, GST compliance, and the use of silver in business operations are essential conditions for claiming ITC.

Is GST applicable on the import of silver in India?

Yes, GST is applicable on the import of silver into India. Imported silver bullion attracts a 6% customs duty (reduced from 15%) plus 3% IGST. Imported silver jewellery attracts 20% customs duty (with import restrictions effective through March 2026) plus 3% IGST. Eligible businesses may claim ITC on the IGST paid, subject to GST rules.

GST on Silver

Silver has long held value in Indian households, serving both as a trusted investment option and a popular metal for jewellery, gifting, and religious use. With the introduction of GST, the taxation on silver became more uniform, replacing multiple state and central levies.

However, many buyers are still unclear about how GST on silver affects prices, making charges, and the overall cost. Understanding these tax components helps buyers make informed decisions and avoid surprises during billing.

Also Check: Silver Rate Today

Key Takeaways

Silver attracts a uniform 3% GST across jewellery, coins, and bars, ensuring consistent taxation nationwide.

If billed separately, making charges attract 5% GST (standard) or 1.5% (for specific handcrafted items under GST 2.0).

GST is calculated on weight and purity, directly impacting the final price and resale value.

Clear invoicing, hallmark checks, and GST breakup help buyers avoid overpayment and tax confusion.

GST Rate on Silver: What Does the Law Say?

Under the GST framework, silver is classified as a taxable precious metal and is subject to a uniform tax rate across India. As per current provisions, the sale of silver attracts 3% GST, which is split equally between CGST and SGST for intra-state transactions, or charged as IGST for inter-state sales. This rate applies to silver in various forms, including bars, coins, and raw silver.

For gst on silver ornaments, the 3% GST is charged on the value of the silver metal. If making charges (labour) are billed separately by the jeweller, they typically attract GST at 5%, increasing the overall tax amount. However, if the ornament is sold at a single consolidated price (value + labour), GST is generally applied on the total value at 3%.

GST is also applied based on the silver's purity and weight. Higher-purity silver results in a higher base value on which GST is calculated. This ensures transparency in pricing and allows buyers to clearly understand how tax affects the final cost of silver purchases.

GST on Silver Jewellery

GST on silver jewellery applies to both the value of silver and, in some cases, the making charges. Understanding how tax is calculated helps buyers clearly see how GST affects the final price.

GST on Silver Jewellery Value - Silver jewellery attracts GST at 3%, calculated on the value of the silver used. This applies whether the jewellery is plain, designer, or hallmark-certified. The tax is based on the weight and purity of silver, ensuring uniform taxation across different jewellery types.

Special GST rates for handcrafted silver - Under GST 2.0 revisions, handcrafted and artisanal silver objects get advantageous GST rates:

Silver filigree work (HSN 7113 11 10): 1.5% GST.

Handmade imitation jewellery (HSN 7117): 1.5% GST.

Making Charges and GST - If making or labour charges are shown separately on the invoice, they attract GST at 5% (instead of 3% on the metal value alone). However, when jewellery is billed at a single consolidated price, GST is generally charged at 3% on the total amount, similar to GST on silver bar transactions.

Hallmark and Special Silver Items - Hallmarking does not change the GST rate. Hallmark-shaped or customised silver jewellery is taxed in the same way as regular silver ornaments.

Simple Price Calculation Example - If silver jewellery worth ₹20,000 is purchased, GST at 3% amounts to ₹600. If making charges are added separately, GST is calculated accordingly, increasing the final payable amount.

GST on Silver Coins (Investment / Collectible)

Silver coins are commonly purchased for investment, gifting, and religious purposes. While they are different from jewellery, GST still applies based on how the coins are classified and valued.

GST Applicability on Silver Coins - Silver coins attract GST at 3%, irrespective of whether they are bought for investment or as collectables. The tax rate remains the same for coins of different weights, provided they are made of silver and are not treated as legal tender. The GST treatment is separate from GST on silver jewellery, which may involve additional making charges.

Role of Purity and Minting - GST is calculated on the value of silver used in the coin, which depends on its purity and weight. Higher purity or heavier coins result in a higher base value, increasing the GST amount. Minting or engraving does not change the GST rate but may increase the overall price.

Price Components of Silver Coins - The final price of a silver coin includes the base silver value and GST at 3%. Any additional design or minting cost becomes part of the taxable value, ensuring transparent pricing for buyers.

GST on Silver Bars & Bullion

Silver bars and bullion are primarily purchased for investment purposes due to their high purity and standardised form. Under GST, silver bars attract a uniform tax rate of 3% across India. This rate applies to investment-grade bullion regardless of weight or purity, and GST is calculated on the transaction value. For investors, understanding GST on silver bars is important because the tax directly affects the total acquisition cost of large-value purchases.

Unlike silver jewellery, silver bars do not involve making or labour charges, which makes GST calculation simpler and more transparent. Compared to silver coins, bars are treated mainly as investment assets rather than collectable items, and the tax is applied purely on the value of silver. This distinction helps investors clearly identify the taxable base without additional cost components.

How GST Impacts Silver Prices (Jewellery vs Investment Silver)

GST plays a key role in determining the final price of silver, whether it is purchased as jewellery or as an investment asset. Understanding gst on silver items helps buyers evaluate costs, resale value, and long-term affordability.

Impact on retail pricing: GST at 3% is added to the base value of silver, increasing the final purchase price for both jewellery and investment silver.

Effect of making charges on jewellery: Silver jewellery may attract additional GST on making charges if billed separately, making jewellery costlier than plain silver bars or coins.

Investment silver pricing: Silver bars and bullion are taxed only on the silver value, with no making charges, keeping the tax impact more predictable.

Resale value consideration: GST paid at the time of purchase is generally not recoverable for individual buyers, which affects net resale returns.

Purity-based valuation: Higher purity silver increases the base value, resulting in a higher GST amount under GST on silver items.

Overall investment cost: While GST raises upfront costs, the uniform rate brings pricing transparency and consistency across markets.

GST Breakdown on Buying Silver: Example Calculation

Understanding how GST is added to silver prices becomes easier with practical examples. Below are simple illustrations showing how gst on silver jewellery and other silver purchases are calculated. on silver jewellery and other silver purchases are calculated.

Example 1: Silver Jewellery Purchase

Suppose you buy silver jewellery worth ₹20,000 based on weight and purity. GST at 3% is applied on the jewellery value, amounting to ₹600. If making charges of ₹2,000 are billed separately and attract GST, additional tax is added on those charges. The final price becomes the jewellery value plus GST and applicable tax.

Example 2: Silver Coin Purchase

You purchase a silver coin weighing 50 grams priced at ₹70 per gram.

Base value = ₹3,500

GST at 3% = ₹105

Total payable amount = ₹3,605

Here, GST is calculated only on the silver value, with no making charges involved.

Example 3: Silver Bar Purchase

For a 1 kg silver bar priced at ₹75,000, GST at 3% equals ₹2,250.

Final price = ₹77,250

Since silver bars do not involve labour charges, GST calculation remains straightforward and transparent.

Also Check: GST Calculator

GST on Silver Ornaments vs Silver Items

Silver ornaments and household silver items are both taxed under GST, but their pricing and tax structure differ due to usage and craftsmanship.

Basis	Silver Ornaments	Household Silver Items (Utensils, Idols, Coins)
Purpose	Jewellery, gifting, personal wear	Utility, religious use, storage, collection
GST Rate	3% on silver value	3% on total value
Making / Labour Charges	Often charged separately and may attract additional GST	Usually minimal or included in total price
Pricing Structure	Silver value + making charges + GST	Weight × purity × rate + GST
Complexity of Billing	Higher, due to separate components	Simpler and more transparent
Resale Consideration	Making charges usually not recoverable	Value mostly depends on silver weight

In short, silver ornaments are priced by craftsmanship, while household silver items are valued by weight and purity, making their GST impact easier to assess.

Also check: Gold Rates Today

Exemptions or Special Cases Under GST

GST on silver is generally applicable, but certain situations are often misunderstood as exemptions. Understanding these special cases helps buyers and sellers correctly apply gst on silver ornaments and avoid incorrect assumptions.

No general exemption on silver: Silver, in any form, is a taxable good under GST and attracts tax at the prescribed rate.

Resale of old silver by individuals: When individuals sell old silver jewellery or household silver for personal reasons, GST is usually not applicable, as the transaction is not treated as a business supply.

Business resale of silver: If silver is resold as part of a business activity, GST applies even if the silver is old or used.

Exports of silver: Export of silver is generally treated as a zero-rated supply under GST, subject to applicable conditions.

Personal use transactions: Transfer of silver without consideration, such as gifts within personal limits, are not subject to GST.

GST for Silver Traders & Manufacturers

Businesses dealing in silver must follow specific GST rules to remain compliant. Understanding gst on silver is essential for correct tax collection, credit claims, and documentation.

GST Registration and Tax Liability - Silver traders and manufacturers are required to charge GST at the applicable rate on all taxable supplies. GST registration is mandatory once turnover crosses the prescribed threshold, and tax must be collected and paid within due timelines.

Input Tax Credit (ITC) Rules - Input tax credit can be claimed on GST paid for silver purchases, raw materials, and business-related expenses, provided they are used for taxable supplies. Proper tax invoices and supplier compliance are necessary conditions for availing of ITC.

Invoice and Documentation Requirements - Tax invoices must clearly mention the HSN code, value of silver, GST rate, tax amount, and buyer details. Accurate invoicing supports return filing and helps avoid disputes during audits.

E-Invoicing and Compliance - Eligible traders and manufacturers must follow e-invoicing norms based on turnover limits. Timely return filing, invoice reconciliation, and record maintenance are essential to ensure smooth GST compliance.

Also Read: Input Tax Credit (ITC) under GST

How to Verify GST Charges on Silver Bills

Checking GST details on silver bills helps buyers avoid overcharging and ensures transparency, especially for GST on silver jewellery purchases.

Verify that GST is charged at 3% on the silver value mentioned in the invoice.

Check whether making or labour charges are listed separately and whether GST is applied correctly on those charges.

Ensure the invoice clearly mentions the HSN code, weight, purity, and rate of silver used.

Confirm that hallmark details match the purity stated on the bill for silver jewellery.

Cross-check the total GST amount with the taxable value to ensure accurate calculation.

Always ask for a proper tax invoice showing GST breakup and seller registration details.

Latest GST Updates on Silver (2024–25)

Recent GST clarifications have reinforced the existing tax structure for silver, bringing consistency and certainty for buyers and sellers. As of 2024–25, the GST on silver in india continues to be levied at a uniform rate of 3% across the country, with no change in the core slab rate for silver in bullion, coin, or ornament form.

Tax authorities have reiterated that GST applies uniformly based on the value of silver, while making or labour charges on jewellery may attract separate GST if billed independently. Greater emphasis has also been placed on proper invoicing, HSN code disclosure, and accurate reporting to reduce disputes and mismatches during compliance checks. Increased scrutiny on invoice accuracy and reconciliation has encouraged better transparency in silver pricing.

Overall, these updates aim to maintain price stability, reduce ambiguity, and ensure smoother GST compliance across the silver trade ecosystem.

Conclusion

Understanding gst on silver helps buyers make informed and cost-effective decisions. Silver attracts a uniform 3% GST, while making charges on jewellery may add to the overall tax burden. GST has simplified silver pricing by replacing multiple taxes, bringing transparency and consistency across markets.