Gold has been an integral part of Indian culture for centuries, symbolizing wealth, prosperity, and security. From weddings and festivals like Diwali, Dhanteras, and Akshaya Tritiya to everyday investment, Indians love gold jewellery. However, when purchasing gold, many buyers often overlook an important aspect: Goods and Services Tax (GST). Understanding GST on gold jewellery is essential for both first-time buyers and seasoned investors.

This guide explains how GST applies to gold jewellery, rates, calculations, and tips for buyers in India.

What is GST on Gold Jewellery?

GST (Goods and Services Tax) is an indirect tax levied on the sale of goods and services in India. It replaced multiple indirect taxes like excise duty, VAT, and service tax. For gold, GST is applied when:

• You purchase gold jewellery from a jeweller.
• You buy gold coins or bars from authorised dealers.

The GST rate is uniform across India and is separate from the making charges, which are fees for designing and crafting jewellery.

Current GST Rates on Gold

As of 2025, the GST structure for gold is as follows:

Example Calculation:

Suppose you buy a gold necklace weighing 10 grams:

• Gold rate = ₹6,000 per gram
• Gold value = 10 × 6,000 = ₹60,000
• Making charges = ₹5,000

GST Calculation:

• GST on gold (3% of ₹60,000) = ₹1,800
• GST on making charges (5% of ₹5,000) = ₹250
• Total GST = ₹2,050
• Total cost = ₹60,000 + ₹5,000 + ₹2,050 = ₹67,050

Why GST Matters for Buyers

1. Transparency in Pricing

Before GST, buyers often faced confusion about multiple taxes hidden in the final price. GST standardizes taxation and ensures transparency, making it clear what you pay for gold versus making charges.

2. Making Charges Are Separate

Many buyers assume that GST is only 3% on the entire jewellery cost. In reality, making charges are taxed separately at 5%, which can slightly increase the overall price.

3. Impact on Resale Value

GST is non-refundable if you sell your gold jewellery later. Therefore, while GST is part of the purchase price, it does not add to resale value. Jewellery sold back to jewellers is generally valued based on gold content and purity, excluding GST originally paid.

4. Effect on Investment

For those buying gold primarily as an investment, GST is an additional cost to consider. Investors may prefer 24K gold coins, bars, or digital gold, where GST applies only on the metal price, and making charges are minimal or absent.

Buying Tips for GST on Gold Jewellery

• Ask for GST Invoice: Always request a tax invoice with GST details. This ensures transparency and compliance.
• Check Gold Purity: GST does not affect purity, but hallmarked jewellery guarantees 22K or 24K gold.
• Compare Making Charges: Making charges vary widely. Some jewellers include GST in the displayed price, while others add it separately.
• Consider Festivals for Purchases: During Dhanteras or Akshaya Tritiya, jewellers often offer discounts on making charges or GST-inclusive schemes.
• Digital Gold and SGBs: For lower GST impact and investment purposes, consider digital gold, ETFs, or sovereign gold bonds.

Common Misconceptions

• GST is refundable on resale: No, GST is paid only at the time of purchase and does not increase resale value.
• All gold is taxed at the same rate: Making charges attract 5%, while gold itself is taxed at 3%.
• GST applies to inherited gold: No, GST is applicable only on purchases; inherited or gifted jewellery is exempt.

GST Compliance Benefits

For buyers, GST compliance ensures:

• Legal ownership documentation
• Easy resale and appraisal at recognised jewellers
• Protection against counterfeit or underweight jewellery
• Participation in government schemes or gold loans that require GST invoices

Conclusion

Understanding GST on gold jewellery is essential for Indian buyers to make informed decisions. Key takeaways:

• Gold attracts 3% GST, while making charges are taxed at 5%.
• GST adds to the cost but does not affect resale value.
• Always ask for a GST invoice and check hallmarks for purity.
• For investment, consider alternatives like digital gold or sovereign gold bonds to reduce GST impact.

By being aware of GST rules, buyers can ensure transparent pricing, safe investment, and better planning for festivals, weddings, or personal collections.