Gold, Silver Retain 3% GST as Council Freezes Tax Rates Ahead of Festive Season

The GST Council in its 56th meeting on September 3, 2025, announced that gold and silver will continue attracting 3% GST on their value and 5% on jewellery making charges. This decision provides much-needed clarity for jewellers and traders, especially ahead of the festive season.

GST 2.0 Reforms Roll Out, but Precious Metal Rates Unchanged at 3%

Despite major indirect tax reforms under GST 2.0, the Council retained the existing tax rates on gold and silver. These metals will still attract 3% GST on transaction value and an additional 5% GST on the making charges of jewellery. The move was announced during the GST Council’s meeting held on September 3, 2025. 

Shift from Four Slabs to Two Main Slabs

The rollout of GST 2.0 also included a significant restructuring of the tax slab system. The 12% and 28% slabs have been scrapped. The revised structure now includes two main slabs of 5% and 18%, aimed at simplifying compliance and boosting consumption. This rationalisation applies to most goods and services except luxury and sin goods, like tobacco or pan masala.

Luxury Goods Attract New 40% GST Slab

The highest tax slab of 40% GST has been introduced for luxury and sin goods. This includes items like pan masala, tobacco, aerated beverages, personal aircraft and yachts. Finance Minister Nirmala Sitharaman confirmed that no more items would be added to this category going forward.

Read More: GST Collections Rise in August 2025 Ahead of GST Council Meet!

Festive Season Implications for the Bullion Trade

With significant sales expected during the upcoming festivals, the decision to retain current GST rates ensures pricing clarity. The unchanged 3% and 5% GST rates will help maintain consumer sentiment and purchasing patterns in the precious metals segment.

Conclusion

The GST Council’s move to retain the existing GST rates on gold and silver offers continuity ahead of the festive season, while the broader GST 2.0 reforms aim to streamline tax compliance. The dual-slab structure and 40% slab for luxury goods mark a new phase in India’s indirect tax landscape.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing