Gold and paperwork don't usually mix well in most people's minds. But if you're buying gold in India, the tax question is unavoidable. Every rupee you spend on jewellery, coins, or bars comes with a GST component, and most buyers only find out the exact number when they're standing at the billing counter doing quick mental math.
This guide breaks down how much GST applies to gold in 2026, how it's calculated, what changed (and didn't) after GST 2.0 rolled out in September 2025, and how to read your invoice properly.
Quick Answer
- Gold attracts 3% GST on the value of the gold itself, whether it's jewellery, coins, or bars.
- Jewellery also carries an extra 5% GST on making charges.
- So a finished piece usually ends up costing a bit more than 3% overall, once making charges are added in.
- These rates haven't moved since GST launched in July 2017, and GST 2.0 didn't touch them either, even though most other goods shifted to new slabs.
Current GST Rate on Gold (2026)
Gold sits outside the standard GST slab structure. Most goods got reorganized into 5%, 18%, and 40% slabs under GST 2.0, but gold kept its own dedicated rate. That's not an oversight, it's deliberate. The GST Council has held gold at 3% to avoid pushing buyers toward unorganized, cash-based markets, which is exactly what happened when gold taxation got too aggressive in earlier decades.
Here's the breakdown as it stands:
- Gold value (jewellery, coins, bars): 3% GST
- Making charges on jewellery: 5% GST
- Interstate purchase: 3% IGST on gold value, 5% IGST on making charges (no CGST/SGST split)
- Intrastate purchase: 1.5% CGST + 1.5% SGST on gold value, 2.5% CGST + 2.5% SGST on making charges
Quick GST Summary Table
GST on Gold Jewellery
Gold jewellery is where most buyers actually feel the tax. It's a composite supply, meaning the law treats the finished piece (gold plus craftsmanship) as one product. But the invoice still needs two separate GST lines: 3% on gold value, 5% on making charges.
Example: a necklace where the gold is worth ₹80,000 and making charges come to ₹8,000.
- GST on gold: 3% of ₹80,000 = ₹2,400
- GST on making charges: 5% of ₹8,000 = ₹400
- Total GST: ₹2,800 on an ₹88,000 piece, roughly 3.2% overall, not a flat 3%
That gap between "3%" and what you actually pay is the part most buyers miss until they see it in writing.
GST on New Gold
Brand new, unworn gold, whether it's a fresh design or a bank-bought bar, follows the standard 3% rule. No exceptions, no separate "new gold" rate. Purity and origin don't change the rate, only the value being taxed does.
GST on Old Gold Exchange
This is where a lot of confusion creeps in, and honestly, it's understandable.
Here's how it works:
- If you're an individual (not a registered dealer) handing over old jewellery, the old gold's value itself doesn't attract GST.
- GST only applies to the value addition, meaning any new gold added beyond what your old jewellery was worth, plus making charges on the new piece.
Example:
- Old jewellery valued at ₹50,000
- New piece costs ₹75,000 in gold value + ₹6,000 making charges
- Value addition = ₹25,000
- GST on new gold: 3% of ₹25,000 = ₹750
- GST on making charges: 5% of ₹6,000 = ₹300
- Total GST: ₹1,050, not tax on the full ₹75,000
That's a real saving, and it's the part most jewellers won't spell out unless you ask.
A quick side note for registered dealers: if they buy your old gold and resell it as-is (no melting), they can use the margin scheme under Rule 32(5) of the CGST Rules and pay GST only on their profit margin. If they melt and recast it into something new, standard 3% GST applies to the full value, though they can claim input tax credit on their inputs.
GST on Gold Coins
- Flat 3% GST on the coin's value
- No making charge usually involved, so that second 5% line won't show up
- A 5-gram coin from a bank and a 5-gram coin from your local jeweller carry the same GST rate
One thing worth knowing if you run a business: companies buying gold coins as promotional gifts can't claim input tax credit on that purchase. The Karnataka Authority for Advance Ruling settled this in the Biostadt India case, treating such coins as gifts under Section 17(5) of the CGST Act, which blocks ITC on gifts regardless of the business reason.
GST on Gold Bars
Same 3% rule as coins, taxed purely on the gold's value, no making-charge component. This makes bars and coins the cleanest option if you want price exposure to gold without paying for craftsmanship you don't need. HSN code 7108 covers bars and biscuits in raw or semi-manufactured form.
GST on 22 Carat vs 24 Carat Gold
There's no separate rate tied to purity. Both are taxed at 3%. What changes is the base value:
- 22 carat gold has less pure gold per gram, so it's priced lower. 3% of a lower number is a lower rupee amount.
- 24 carat gold is priced higher (99.9% pure), so the GST amount in rupees works out higher for the same weight.
Carat purity affects your bill through price, not through a different tax slab.
GST on Making Charges
Making charges cover labour, design, and wastage, taxed as a service at 5%, separate from the 3% on gold value.
- Some jewellers charge a flat percentage of gold value, commonly 8-25% depending on design complexity
- Others charge a fixed rate per gram
- Either way, 5% GST applies to whatever that making charge amount is
Registered jewellers can claim 2% input tax credit against making-charge expenses in certain cases, but this doesn't pass through to you directly. It affects the jeweller's tax liability, not your final price.
GST Calculation Formula
- GST on Gold Value = Weight (grams) × Rate per gram × 3%
- GST on Making Charges = Making Charge Amount × 5%
- Total Payable = Gold Value + Making Charges + GST on Gold Value + GST on Making Charges
Calculation Examples
₹25,000 purchase (gold coin, no making charges): GST = 3% of ₹25,000 = ₹750 → Total payable = ₹25,750
₹50,000 purchase (jewellery: ₹44,000 gold + ₹6,000 making):
- GST on gold = ₹1,320
- GST on making = ₹300
- Total GST = ₹1,620 → Total payable = ₹51,620
₹1 lakh purchase (jewellery: ₹88,000 gold + ₹12,000 making):
- GST on gold = ₹2,640
- GST on making = ₹600
- Total GST = ₹3,240 → Total payable = ₹1,03,240
GST Components: CGST + SGST vs IGST
- Buying within your own state: GST splits evenly. That's 1.5% CGST + 1.5% SGST on gold value, and 2.5% CGST + 2.5% SGST on making charges.
- Buying from a seller registered in a different state (say you're in Jaipur ordering from a Delhi-registered jeweller), the whole amount is charged as IGST instead, same combined rate, just no state/central split.
Gold Price vs GST: Not the Same Thing
Gold price is set by the market, moving daily on international rates, the rupee-dollar exchange rate, and local demand. GST is a fixed percentage charged on top of that price. Your jeweller doesn't control either one directly, they're just passing through the market rate and adding the mandated tax. If gold prices rise, your GST amount rises too, since it's a percentage, not a flat fee.
GST Before vs After the GST Regime
Before July 2017, buyers paid roughly 1% VAT plus 1% service tax, so total tax sat around 2%, though it varied by state. Making and repair charges initially attracted a steep 18% tax under GST, which caused enough pushback from the jewellery trade that the Council reduced it to 5% soon after.
GST on Hallmarked Gold
Hallmarking and GST are two separate things entirely. Hallmarked gold attracts the same 3% GST as non-hallmarked gold, hallmarking is a purity certification from BIS, not a tax category. What hallmarking does affect is your confidence in what you're paying for, since a BIS hallmark with a HUID number confirms the actual purity your 3% GST gets calculated against.
GST on Digital Gold
Digital gold, bought via apps in small denominations without physical delivery, is taxed the same as physical gold: 3% GST on the purchase amount.
- Invest ₹5,000 in digital gold → ₹150 goes to GST → ₹4,850 gets converted into gold grams at the prevailing rate
- Some platforms also charge insurance, storage, or trustee fees, which may carry separate GST treatment
GST on Online Gold Purchase
Buying gold online, jewellery from a brand's site or bars from a bank's portal, follows the same GST structure as in-store. The only thing that changes is whether CGST+SGST or IGST applies, based on whether the seller's state matches your delivery state, not the fact that it's an online purchase.
GST on Gold Investment
Your GST bill looks quite different depending on the investment format:
- Physical gold, coins, or bars: 3% GST, no way around it
- Digital gold: 3% GST, same as physical
- Sovereign Gold Bonds (SGBs): 0% GST, government securities, not goods
- Gold ETFs / Mutual Funds: 0% GST on underlying gold, though brokerage and fund charges attract 18%
If you're purely optimizing for tax efficiency, SGBs and ETFs sidestep the 3% entirely. The tradeoff: no physical gold in hand, and SGBs come with an 8-year lock-in (early exit windows open after year 5).
GST for Jewellers
- GST registration is mandatory once turnover crosses ₹40 lakh for goods (lower in special category states)
- Invoices must show gold value, making charges, and GST as separate line items, clubbing everything into one number isn't allowed
- HSN codes need to be tracked correctly (7108 for bars, 7113 for jewellery, 7118 for coins)
- E-way bills are required when moving gold above the prescribed value threshold between locations
Input Tax Credit (ITC)
Registered jewellers can claim ITC on GST paid for raw gold, job-work charges, and other business inputs. A couple of limits worth knowing: ITC isn't available on gold coins given away as gifts (blocked under Section 17(5) of the CGST Act), and if a jeweller buys second-hand gold under the margin scheme, no ITC applies since tax is only paid on the margin.
Sample Invoice
A compliant invoice for a ₹1 lakh jewellery purchase should look roughly like this:
If a jeweller hands you one lump-sum figure with no breakup, that's a red flag. Ask for a proper GST-compliant invoice before you pay.
Government Rules
Gold's GST treatment sits under Chapter 71 of the Customs Tariff Act and Notification No. 01/2017-Central Tax (Rate), amended over time by the GST Council. CBIC Circular No. 47/21/2018-GST clarifies valuation for old gold exchanges. The margin scheme for second-hand goods dealers falls under Rule 32(5) of the CGST Rules, 2017. None of this has changed the core 3%/5% structure since 2017.
Latest GST Updates
The GST 2.0 restructuring took effect on 22 September 2025, reorganizing most goods into simplified 5%, 18%, and 40% slabs. Gold, along with a small set of other precious metals, was kept outside this restructuring and kept its dedicated 3% rate. So if you've heard chatter about "new GST slabs" and wondered whether gold got cheaper or pricier, the honest answer is: nothing changed for gold specifically.
On the import side, basic customs duty on gold has moved around more than GST has, dropping from 15% in early 2024 to 6% by mid-2024, and further to 5% following the Union Budget 2026, plus a 1% Agriculture Infrastructure and Development Cess.
Common Myths, Cleared Up
- "Hallmarked gold has higher GST." No, hallmarking and GST are unrelated, the rate is 3% either way.
- "22K and 24K gold have different GST rates." No, both are taxed at 3%, the rupee amount differs because the value differs.
- "You pay GST twice when exchanging old gold." No, GST applies only to the value addition, not the full new-item value.
- "GST 2.0 changed gold's tax rate." No, gold was specifically kept out of the September 2025 restructuring.
- "Making charges are optional to itemize." They're not, a compliant invoice must show gold value and making charges as separate lines.
Common Buyer Mistakes
- Accepting a single "all-inclusive" price without asking for the GST breakup, which makes comparing jewellers harder
- Assuming higher-carat gold automatically means a worse tax deal, when it's really just a bigger base number
- Skipping the old-gold-exchange value-addition question and assuming tax on the full new piece
- Not checking the HUID hallmark number, even though your GST is calculated on a declared purity the hallmark is meant to guarantee
How to Save Money While Buying Gold
- Compare making charges across two or three jewellers before committing, gold rates barely differ between sellers on a given day, but making charges can swing 5-10 percentage points
- If exchanging old gold, ask specifically for the value-addition calculation, not a flat new-item quote
- For pure investment, weigh the 3% GST hit on physical or digital gold against 0% on SGBs before buying, especially for larger amounts
Things to Check Before Buying Gold
- BIS hallmark and HUID number, verify through the BIS Care app if you want to be thorough
- Itemized invoice, ask for it before paying, not after
- Whether making charges are a flat percentage or per-gram rate
- The day's gold rate against a reliable source like the India Bullion and Jewellers Association, so you know the base price is fair before tax even enters the picture
How GST Impacts Gold Price
GST adds a fixed percentage on top of the market rate. It doesn't change how gold prices move day to day, but it does add roughly 3-8% to your total outlay depending on how much of your purchase is making charges versus raw gold value. Coins and bars, with no making charges, feel the smallest GST impact. Elaborate jewellery designs with higher making-charge percentages feel it more.
How GST Affects Investors
For pure investment, GST is a real drag on returns, especially for short holding periods, since you're paying 3% upfront that the gold price needs to appreciate past just to break even. That's exactly why SGBs, which skip GST entirely and also pay 2.5% annual interest, tend to come up as the more tax-efficient choice for long-term investors who don't need physical possession.
Jewellery vs Coins vs Bars
Tax Comparison
Who Pays GST?
The buyer bears the cost, added at the point of sale. The jeweller collects it on the government's behalf and remits it through their GST returns. Even when a business claims ITC on its own inputs, that doesn't reduce what you pay as the end consumer, ITC affects the seller's tax accounting, not your retail price.
Can GST Be Claimed?
Only registered businesses using gold for business purposes, manufacturing or resale, can claim input tax credit, and only with a valid invoice from a GST-compliant supplier. Individual consumers buying for personal use, jewellery, gifting, or investment, can't claim any GST credit. It's a straightforward cost to them.
Does GST Increase Gold Prices?
Yes, directly. GST adds 3% to the base gold value and 5% to making charges, a real increase over a no-tax scenario. Compared to the pre-GST era, the tax on gold value itself actually went up slightly (from ~2% to 3%), while the making-charge tax came down significantly from its initial 18% to the current 5%.
Expert Tips
- Ask for the GST breakup before finalizing a purchase, not after
- Compare making charges, not just gold rates, that's where jewellers have the most pricing flexibility
- Get the value-addition calculation in writing if exchanging old gold
- Weigh SGBs seriously before defaulting to physical gold for a large investment, if tax efficiency matters to you
Conclusion
The GST structure on gold in India is more predictable than it first looks: 3% on the gold's value, 5% on making charges for jewellery, and no change to either rate through the September 2025 GST 2.0 overhaul. Where buyers usually get confused is in the details, old gold exchange math, digital gold treatment, or how making charges stack on the base rate. A proper itemized invoice and a little upfront homework save you from surprises at the billing counter.