GST on Gold and Silver: Jewellery, Coins and Making Charges

Gold is one of the few things in India that does not sit in a normal GST slab. GST on gold is a flat 3%, and the same rate applies to silver and to gold and silver jewellery. Most of the confusion at the jeweller's counter is not about the rate itself but about what it is charged on: the making charges, the old gold you trade in, and the coins or digital gold you buy as an investment. This guide covers each, with a worked bill in rupees.

GST on gold: the 3% rate

Precious metals were given their own rate when GST launched in 2017, well below the lowest regular slab, to keep the tax on a high-value, low-margin trade in line with what it had been before. That rate is 3%, and it covers:

The 3% is split the usual way. When the jeweller and the place of delivery are in the same state, the bill shows 1.5% CGST and 1.5% SGST. When you buy from a seller in another state, typically online, it shows 3% IGST. The total is the same; see CGST, SGST and IGST for why the split exists.

Did GST 2.0 change the rate on gold?

No. The GST 2.0 rate rationalisation that took effect on 22 September 2025 collapsed most goods into two slabs, 5% and 18%, with a 40% rate for a short list of luxury and sin goods. Gold, silver and jewellery were outside that exercise and stayed on their own 3% rate, so a bill for gold after 22 September looks exactly as it did before.

It helps to keep two numbers apart. The gold rate quoted in the market, per gram or per 10 grams, is the price of the metal and changes daily. GST on gold is the tax on top of that price, and has stayed at 3%. Any rise in what you pay since last year is the price of gold, not the tax.

GST on making charges

Making charges cause most of the questions, because there are two different situations that look alike.

You buy finished jewellery from a jeweller. The jeweller is selling you a piece of jewellery. The making charge is part of what that piece costs, the same way labour is part of the price of any manufactured item, even if the bill shows it on a separate line. The whole value, gold plus making plus any stones priced with the piece, is taxed at 3%. A jeweller who charges 3% on the gold and a higher rate on the making line, on a straightforward sale of finished jewellery, is not following the usual treatment, and it is worth asking why.

Someone makes jewellery from gold that is not theirs. When a jeweller sends its own gold to a karigar to be made into ornaments, the karigar does not sell any gold; it supplies a making service and bills only for labour. That is job work, and job work on jewellery is taxed at 5% of the labour charge. Something similar happens when you take your own old gold to a goldsmith to be remade: there is no sale of gold to you, only a charge for the work, and GST applies to that charge as a service. The exact rate in that case depends on how the service is classified, so if the amount is significant, ask the goldsmith what rate they are charging and why. Our job work HSN and SAC guide covers how job work is classified.

A jewellery bill, worked out

Here is a typical bill for a 10 gram 22 carat chain bought from a jeweller in the same state. The gold rate and making percentage are illustrative; use the day's rate and your jeweller's making charge.

The GST is ₹3,360, which is 3% of ₹1,12,000. Had GST been charged on the gold alone, it would have been ₹3,000; the extra ₹360 is the 3% on the making charge. Hallmarking charges, where shown separately, are usually treated as part of the price of the piece too. If you want to work the numbers the other way, from a GST-inclusive price, our GST calculation guide has the formula.

Old gold exchange

Exchanging old jewellery against new is common, and the bill can look confusing. The way GST views it is as two transactions that happen at the same counter:

1. The jeweller buys your old gold. You are an individual selling your own personal jewellery, not a business, so you do not charge GST on it and nothing is added for that leg.
2. The jeweller sells you new jewellery. That sale is taxed at 3% on the value of the new jewellery, including its making charges.

The value of your old gold is then set off against what you owe. On this reading, GST is worked out on the value of the new piece, not just on the balance you pay in cash. So if new jewellery worth ₹1,50,000 is exchanged against old gold valued at ₹1,00,000, the 3% applies to ₹1,50,000 (₹4,500), and you pay ₹50,000 plus ₹4,500.

In practice, jewellers do not all present exchange bills the same way, and some show GST only on the net amount. This is not an area where we would tell you a particular bill is wrong without seeing it. What you can reasonably ask for is a bill that shows the value of the new jewellery, the GST on it, and the value given for your old gold, as separate lines, so you can see exactly how the tax was calculated.

Selling old gold outright for cash, with no new purchase, is simpler: as a private individual you charge no GST. Any capital gain on the sale is an income tax question, not a GST one.

Gold coins, bars, digital gold and gold bonds

Gold coins and bars carry the same 3% GST as jewellery, whether bought from a jeweller, a bank or an online seller. Because making charges on coins and bars are small or nil, the GST is close to 3% of the metal value.

Digital gold, sold in small amounts through apps and payment platforms and backed by physical gold held in a vault, is charged 3% GST when you buy it. That is part of why the buy and sell prices on these platforms differ: the GST paid at purchase is not refunded when you sell back.

Sovereign Gold Bonds and gold ETF and gold mutual fund units are securities, not goods, so no GST is charged on buying them. For an investor who does not need physical gold, that 3% difference is one of the points usually weighed in choosing between them.

GST on silver and diamonds

Silver is treated exactly like gold: 3% on bars, coins, articles and jewellery, with making charges on finished silver jewellery taxed along with the piece at 3%.

Diamonds sold loose, whether rough or cut and polished, have their own special rate that is well below 3%, set to suit the diamond trade, where stones change hands many times between cutting and retail. Once a diamond is set in a piece of jewellery and sold as part of it, the piece is generally sold as jewellery and the whole value is taxed at 3%. If you are buying loose stones in quantity, ask the seller to confirm the rate on the bill for the specific stone. The rate depends on its classification, and we would rather not quote a figure here that you then rely on.

Checking the GST on a jeweller's bill

Jewellery is one of the largest single purchases most families make, and the GST on it runs into thousands of rupees. A proper GST invoice from a jeweller should show:

• the jeweller's 15-character GSTIN, name and address;
• the HSN code of the item, the weight and purity, the rate per gram and the making charge;
• the taxable value and the GST split into CGST and SGST, or IGST;
• for an exchange, the value given for your old gold on its own line.

The GSTIN is the part worth checking. GST collected under a cancelled, suspended or made-up number may never reach the government, and a "GST bill" from a seller who is not registered is not a valid tax invoice. Look the GSTIN up and confirm that it is Active and that the legal or trade name matches the shop. Our guides on whether the GST on your bill is real and spotting a fake GST number walk through it.

Businesses that buy gold or jewellery in volume, such as wholesalers, lenders taking gold as collateral, or corporate gifting teams, can run the same check automatically. A GSTIN verification API returns a supplier's status, legal name and filing record before an invoice is paid.

Frequently asked questions