Gold is the largest commodity purchase for most Indian households. GST applies at every stage of the gold supply chain, from imported bullion to the necklace on the shop counter. The rate is low (3%), but how making charges, old gold exchange and second-hand gold are taxed trips up both buyers and jewellers.
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GST Rate Structure for Gold and Jewellery
Gold sits outside the standard GST slabs. After GST 2.0 most goods fall under 5%, 18% or 40%, but gold, silver, platinum and jewellery keep their dedicated 3% rate.
Tax Rate Chart
GST Rates on Gold and Related Products (2026)
3% on precious metals and jewellery across all purities
Gold Jewellery (18K, 22K, 24K)
HSN 7113: ITC available for registered jewellers
Gold Bars, Biscuits, Ingots
HSN 7108: ITC available
Gold Coins
HSN 7118: ITC available
Separately priced labour (custom orders)
Making charges on ready-made jewellery are taxed at 3%
Silver Jewellery
HSN 7113: same rate as gold
Imitation Jewellery
HSN 7117: same 3% rate, but no e-way bill exemption
Source: Notification No. 9/2025-Central Tax (Rate), Schedule IV; CBIC FAQs on Gems and Jewellery sector
| Gold Product | HSN Code | GST Rate |
|---|---|---|
| Gold jewellery (any purity) | 7113 | 3% |
| Gold bars and biscuits | 7108 | 3% |
| Gold coins | 7118 | 3% |
| Silver jewellery | 7113 | 3% |
| Platinum jewellery | 7113 | 3% |
| Imitation jewellery | 7117 | 3% |
| Hallmarking charges (service) | SAC 998346 | 18% |
The 3% rate is the same for every purity. Whether you buy 18-karat, 22-karat or 24-karat gold, the rate on the metal does not change.
How GST Applies to Making Charges
This is the most misunderstood part of gold GST. The CBIC sector FAQs for gems and jewellery separate two situations:
- Ready-made (off-the-shelf) jewellery: The jeweller is selling a finished ornament. Making charges are part of the price of that ornament, so the whole value is taxed at 3%, even if the invoice shows making charges on a separate line.
- Custom work where gold and labour are separately priced: If a customer orders an ornament to their own design and gold and labour are equally important and priced separately, or the customer supplies their own gold for remaking, the gold is taxed at 3% and the labour at 5%.
In practice, many retail jewellers bill making charges at 5% on every invoice. If you are buying ready-made jewellery and the invoice shows 5% on making charges, you can ask the jeweller how they have classified the sale.
Worked Example: Ready-Made Necklace
You buy a 22K gold necklace weighing 20 grams off the shelf. The gold rate is Rs 7,500 per gram (illustrative) and making charges are Rs 1,500 per gram.
| Component | Calculation | Amount |
|---|---|---|
| Gold value | 20g x Rs 7,500 | Rs 1,50,000 |
| Making charges | 20g x Rs 1,500 | Rs 30,000 |
| Taxable value | Gold + making | Rs 1,80,000 |
| GST at 3% | 3% of Rs 1,80,000 | Rs 5,400 |
| Total payable | Rs 1,85,400 |
If the same necklace were a custom order with separately priced labour, GST would be Rs 4,500 on the gold (3%) plus Rs 1,500 on the labour (5%), a total of Rs 6,000.
Within the state, the 3% splits into 1.5% CGST and 1.5% SGST. For an interstate sale, the jeweller charges 3% IGST instead.
Old Gold Exchange: How GST Applies
When you hand over old jewellery as part payment for new jewellery, the CBIC sector FAQs say GST is payable on the open market value of the new jewellery. The old gold is part of what you pay, not a discount on the taxable value.
Exchange Calculation Example
You hand over an old gold chain valued at Rs 1,05,000 and buy the ready-made necklace from the example above (gold Rs 1,50,000 plus making charges Rs 30,000).
| Component | Amount |
|---|---|
| Taxable value of new necklace | Rs 1,80,000 |
| GST at 3% | Rs 5,400 |
| Invoice total | Rs 1,85,400 |
| Less: Old gold value adjusted | Rs 1,05,000 |
| Balance you pay | Rs 80,400 |
Some jewellers compute GST only on the balance after deducting old gold. That lowers the tax shown on the bill but does not match the official position, and it is a common audit query for jewellers.
For you as the customer, handing over personal jewellery is not a taxable supply. The jeweller records it as a purchase from an unregistered person. Reverse charge does not currently apply to purchases of old gold from unregistered individuals.
Margin Scheme for Second-Hand Gold
When a registered dealer buys old jewellery from an individual and resells it without changing its form, the margin scheme under Rule 32(5) of the CGST Rules applies:
- GST is charged only on the margin (selling price minus purchase price), not the full sale value
- If the selling price is lower than the purchase price, no GST is payable
- The dealer cannot claim ITC on the purchase
If the jeweller melts the old gold or remakes it into new jewellery, the margin scheme does not apply. GST at 3% is then due on the full sale value of the new product. Advance rulings have taken this view, so do not apply the margin scheme to refined or remade gold. Our GST margin scheme guide explains the rule in more detail.
Margin Scheme Example
A jeweller buys old gold bangles from a customer for Rs 80,000 and resells them as they are for Rs 90,000.
| Component | Amount |
|---|---|
| Selling price | Rs 90,000 |
| Purchase price | Rs 80,000 |
| Margin (taxable value) | Rs 10,000 |
| GST at 3% on margin | Rs 300 |
Without the margin scheme, GST would be Rs 2,700 (3% of Rs 90,000), so the scheme saves Rs 2,400 on this sale.
HSN Codes for Gold and Related Products
| Product | HSN Code | Description |
|---|---|---|
| Gold bars, biscuits, ingots | 7108 | Gold, unwrought or in semi-manufactured forms |
| Gold waste and scrap | 7112 | Waste and scrap of precious metal |
| Gold, silver and platinum jewellery | 7113 | Articles of jewellery of precious metal |
| Gold coins | 7118 | Coin |
| Imitation jewellery | 7117 | Imitation jewellery of base metal or other materials |
| Diamonds | 7102 | Diamonds, not mounted or set |
| Precious stones (unset) | 7103 | Precious and semi-precious stones other than diamonds |
Jewellers with annual aggregate turnover above Rs 5 crore must report 6-digit HSN codes on invoices and in GSTR-1. Businesses at or below Rs 5 crore must use at least 4-digit codes on B2B invoices.
Import of Gold: Customs Duty and IGST
From 13 May 2026, gold imports attract 15% customs duty, up from 6% (5% BCD + 1% AIDC) after the July 2024 cut. The rates below are under Notification No. 45/2025-Customs as amended by Notification No. 15/2026-Customs (BCD) and Notification No. 11/2021-Customs as amended by Notification No. 16/2026-Customs (AIDC). Gold is exempt from the Social Welfare Surcharge.
| Levy | Rate | Applied On |
|---|---|---|
| Basic Customs Duty (BCD) | 10% | Assessable (CIF) value |
| Agriculture Infrastructure and Development Cess (AIDC) | 5% | Assessable (CIF) value |
| IGST | 3% | CIF value + BCD + AIDC |
| Total effective duty | 18.45% |
Import Duty Calculation Example
A jeweller imports 1 kg of 24K gold at a CIF value of Rs 75,00,000 (illustrative).
| Levy | Calculation | Amount |
|---|---|---|
| BCD (10%) | 10% of Rs 75,00,000 | Rs 7,50,000 |
| AIDC (5%) | 5% of Rs 75,00,000 | Rs 3,75,000 |
| Value for IGST | Rs 75,00,000 + Rs 7,50,000 + Rs 3,75,000 | Rs 86,25,000 |
| IGST (3%) | 3% of Rs 86,25,000 | Rs 2,58,750 |
| Total duty and tax | Rs 13,83,750 |
The IGST paid on import (Rs 2,58,750) is available as input tax credit against output GST. BCD and AIDC are not creditable. For how these levies feed into the daily retail rate, see our guide on how the gold rate in India is worked out.
ITC Rules for Jewellers
Registered jewellers (under the regular scheme) can claim ITC on:
- Gold bought from registered suppliers (3% GST on purchase invoices)
- IGST paid on gold imports
- Job work and hallmarking charges from registered service providers
- Rent, utilities, packaging, software and professional services used for the business
ITC is not available on:
- Old gold bought from unregistered individuals (no GST was charged)
- Goods resold under the margin scheme
- Personal consumption, and blocked credits under Section 17(5), such as most motor vehicles
ITC depends on your supplier filing their GSTR-1. Reconcile your purchase register with GSTR-2B every month. Refiner, wholesaler and retailer chains often produce HSN and GSTIN mismatches. See our GSTR-2B reconciliation guide for the process.
Composition Scheme for Small Jewellers
Jewellers with annual turnover up to Rs 1.5 crore (Rs 75 lakh in special category states) can opt for the GST composition scheme:
| Feature | Regular Scheme | Composition Scheme |
|---|---|---|
| Tax rate | 3% (5% on separately priced labour) | 1% of turnover (0.5% CGST + 0.5% SGST) |
| ITC | Available | Not available |
| Invoice | Tax invoice with GST shown | Bill of supply, no GST collected from customer |
| Returns | GSTR-1 and GSTR-3B | CMP-08 quarterly, GSTR-4 annually |
| Interstate sales | Allowed | Not allowed |
| Sales through e-commerce operators | Allowed | Allowed within the state (goods only, since October 2023) |
Gold is a high-value, low-margin trade, and composition dealers pay 1% of turnover without ITC on their gold purchases. For most jewellers buying from registered suppliers, the regular scheme works out cheaper.
E-Invoicing for Jewellers
E-invoicing is mandatory for B2B invoices if your aggregate turnover crossed Rs 5 crore in any financial year from 2017-18 onwards. Each B2B invoice must be reported on the Invoice Registration Portal (IRP) to get an IRN and QR code. Taxpayers with turnover of Rs 10 crore or more must report invoices within 30 days of the invoice date.
Retail (B2C) sales do not need e-invoices unless turnover exceeds Rs 500 crore, when a dynamic QR code is required. See our e-invoicing guide for the IRP process.
E-Way Bill: Gold Is Exempt
Rule 138(14) of the CGST Rules exempts goods under Chapter 71 from e-way bills. That covers pearls, precious and semi-precious stones, precious metals, and gold and silver jewellery. The exemption has two limits:
- Imitation jewellery (HSN 7117) is not exempt and needs an e-way bill above the usual value threshold
- Kerala requires e-way bills for intrastate movement of Chapter 71 goods under its own state notification
Even without an e-way bill, gold in transit must travel with a tax invoice, bill of supply or delivery challan.
Hallmarking and GST
BIS hallmarking has been mandatory for gold jewellery since June 2021, and every piece must carry a 6-digit HUID. Hallmarking does not change the GST rate on jewellery. Jewellery under 2 grams and certain export items are exempt from hallmarking.
- Hallmarking charges paid to an assaying and hallmarking centre attract 18% GST (SAC 998346), which the jeweller can claim as ITC
- The customer does not pay separate GST on hallmarking. The cost is built into the jewellery price and taxed at 3%.
Job Work in the Gold Industry
Many jewellers send gold to karigars (artisans) for manufacturing. Under Section 143 of the CGST Act, a registered jeweller can send gold to a job worker without paying GST, using a delivery challan. The gold or finished jewellery must come back within 1 year. If it does not, the original dispatch is treated as a supply and GST is due with interest.
The job worker charges GST on their labour, not on the gold. For rates and ITC rules, see our job work GST guide.
GST on Digital Gold, ETFs and Gold Bonds
| Product | GST Treatment |
|---|---|
| Digital gold (bought through apps) | 3% GST, included in the price quoted |
| Gold ETF units | No GST on units (securities); brokerage attracts 18% |
| Sovereign Gold Bonds | No GST (government security) |
| Gold mutual funds | No GST on units |
When you convert digital gold into coins or jewellery for delivery, any making or delivery charges are taxed as part of that supply. For income tax on gold investments, see our guides on Sovereign Gold Bond taxation and income tax on selling gold jewellery.
Practical Compliance Checklist for Jewellers
- Classify each sale: ready-made jewellery at 3% on the full value; separately priced labour on custom orders at 5%.
- HSN code on every invoice: 7113 for jewellery, 7108 for bars, 7118 for coins, 7117 for imitation jewellery.
- Old gold exchange: charge GST on the full value of the new jewellery and show the old gold as an adjustment against payment.
- Old gold purchases: keep a purchase voucher for every buy from individuals, with the seller's name, address, ID, weight and purity.
- Stock register: maintain daily stock by weight and purity, including gold sent to and received from job workers.
- GSTR-1 reporting: report all B2B invoices individually. Report interstate B2C invoices above Rs 1 lakh individually (B2CL), and other B2C sales as state-wise consolidated figures.
- Cash limits: you cannot accept Rs 2 lakh or more in cash for a single sale (Section 269ST), and you must collect the buyer's PAN for jewellery purchases above Rs 2 lakh.
- Annual return: file GSTR-9 by 31 December following the financial year, and GSTR-9C if turnover exceeds Rs 5 crore.
If you run a jewellery business and want monthly returns handled, see our GST return filing service. For the income tax side of the trade, read our guide to income tax for jewellers and goldsmiths.
Sources: Notification No. 9/2025-Central Tax (Rate) dated 17 September 2025 (which superseded Notification No. 1/2017-Central Tax (Rate)), Schedule IV; CBIC FAQs on the Gems and Jewellery sector; CGST Rules, 2017, Rule 32(5) (margin scheme) and Rule 138(14) (e-way bill exemptions); Section 143, CGST Act, 2017 (job work); Customs Notification No. 45/2025-Customs as amended by No. 15/2026-Customs, and No. 11/2021-Customs as amended by No. 16/2026-Customs (both dated 12 May 2026); BIS Hallmarking Order, 2020, as amended. Rates verified as of September 2026; customs duty updated 13 October 2026.
