GST on Gold in India: Updated Rates for Jewellery, Coins, Bars & Biscuits

Gold has always held a special place in Indian culture, symbolizing wealth, security, and tradition. As a popular investment and gifting option, gold transactions in India are substantial both in volume and value. However, with the ever-evolving taxation landscape, it is vital for buyers, sellers, and businesses involved in gold trade to understand the applicable Goods and Services Tax (GST) rates and related regulations.
This guide delves into the GST framework for gold in India as of 2025, covering standard rates on gold purchase, jewellery, coins, bars, and biscuits, as well as the GST on making charges of jewellery. Whether you are a consumer planning a purchase or a business navigating compliance, this comprehensive overview will help you make informed decisions.

Understanding GST on Gold in India (2025)

What is GST?

GST is an indirect tax subsuming various taxes like VAT, service tax, excise duty, and customs duty, implemented uniformly across India. For gold, before GST’s introduction, multiple taxes led to a complex and opaque tax structure.
GST simplified this by levying a fixed percentage on gold transactions, making compliance easier and reducing cascading taxes.

Why GST on Gold?

To create a unified tax system
To curb tax evasion and illegal trade
To ensure transparency on pricing and tax incidence
To streamline import and domestic supply chain taxation

GST Rates on Different Forms of Gold

Gold Form	GST Rate (2025)
Gold (all types & purity, incl. coins, bars, biscuits)	3% (1.5% CGST + 1.5% SGST) on the value of gold
Making charges on jewellery	5% (if billed separately)
Making charges (bundled pricing)	3% flat on net amount

Explanation:

Gold purchase (coins, bars, biscuits): GST is charged at 3% of the value of the gold purchased.
Jewellery:
GST is charged twice:

3% on the gold value
5% on the making/processing charges, if those are billed separately.

When making charges are included in the total price (bundled), a uniform 3% GST is applied on the entire amount.

GST on Gold Jewellery: Details & Pricing Impact

Calculation Example:
Suppose you purchase gold jewellery with:

Gold value = ₹1,00,000
Making charges = ₹15,000

Then the GST payable will be:

GST on gold value = 3% of ₹1,00,000 = ₹3,000
GST on making charges = 5% of ₹15,000 = ₹750
Total GST = ₹3,750

Your total amount payable = Gold value + Making charges + GST = ₹1,00,000 + ₹15,000 + ₹3,750 = ₹1,18,750

GST on Gold Coins, Bars & Biscuits

The standard 3% GST on the value of gold applies uniformly to gold coins, bars, and biscuits.
Making charges seldom apply on bars and biscuits, however, if any craftsmanship or processing beyond refining is charged, GST at 5% for making charges may apply.
Prices of these items include the base metal value plus customs duties, on which GST is calculated.

Custom Duty & Import-Related Taxes on Gold

Recent government notifications have reduced the customs duties on gold imports:

Basic customs duty reduced from 10% to 5%
Agriculture Infrastructure and Development Cess lowered from 5% to 1%
Overall effective custom duty rate decreased to 6% from previous 15%

This reduction, combined with the fixed GST rate of 3%, has resulted in a more favorable tax environment and impacted domestic gold prices.

GST Applicability on Digital Gold & Other Gold Products

GST at 3% applies to purchases of digital gold (represented by e-gold tokens or electronic contracts).
When digital gold is redeemed for physical delivery, GST on making charges applies as per physical gold Jewellery rules.
Investment products like Gold ETFs and Sovereign Gold Bonds (SGBs) are exempt from GST.

Compliance Guidelines & Key Points for Consumers and Businesses

Always ask for an itemized invoice separating gold value and making charges.
Verify the GSTIN of the seller and ensure GST is properly charged.
For making charges billed separately, expect 5% GST on those charges.
Gold sellers are required to maintain documentation and report supplies for input credit claiming.
Transportation of gold requires compliance with e-way bill rules for goods valued above Rs. 50,000.

Challenges and Clarifications

Consumers may be unaware that GST is charged on making charges separately, leading to confusion.
Sellers sometimes bundle making charges within the gold price to apply a uniform 3% GST, which is permissible but should be clear upfront.
Price difference across sellers may be due to variations in making charges, purity differential, or GST treatment.
Non-payment of GST by unscrupulous sellers is illegal and can attract penalties.

Recent Policy Updates & Industry Impact

GST council and government moves to lower customs duty on gold improve affordability.
New provisions on mandatory e-invoicing and e-way bills increase transparency.
Growing digital gold market aligns taxation with physical gold purchase for parity.
Retailers and jewellers increasingly digitize billing for GST compliance.

Case Studies: Impact of GST on Gold Jewelry Purchase

Traditional Jewellery Store

Before GST, heavy VAT and excise duties led to variable state taxation.
After introduction of GST at 3% + 5% on making charges, tax is uniform nationwide.
Jewellery stores must now clearly mention GST charges separately to build trust.
Input tax credit enables jewelers to reduce costs on raw material purchases.

Online Gold Retail & Digital Gold Platforms

Digital gold platforms like MMTC-PAMP and certain fintech providers now charge 3% GST.
Retail consumers benefit from transparent pricing and compliance by government-backed platforms.
Physical gold delivery attracts applicable GST and customs duties.

Frequently Asked Questions (FAQs)

Q1. What is the GST rate on gold jewellery in India in 2025?
A. GST is charged at 3% on the gold value and 5% on the making charges if billed separately.

Q2. Does GST apply to gold coins and bars?
A. Yes, a flat 3% GST is applicable on the purchase value.

Q3. Is there GST on digital gold?
A. Yes, digital gold purchases attract 3% GST.

Q4. What happens if making charges are bundled in jewellery pricing?
A. A unified GST of 3% is levied on the total amount.

Q5. Can I claim GST input credit on gold purchase?
A. Registered jewelers can claim input credit on raw material but not on making charges.

Conclusion

In 2025, the GST framework for gold in India provides a streamlined and uniform tax structure that applies a 3% GST rate on gold value and 5% GST on making charges (if billed separately), covering all forms including jewellery, coins, bars, and biscuits.
Understanding this taxation is vital for both buyers and businesses to ensure compliance, accurate pricing, and transparent transactions. While the upfront cost of GST does add to the price of gold, the uniform tax rate simplifies the process, reduces cascading taxes, and improves market fairness.
For consumers, always verify GST charges in invoices; for businesses, staying updated with GST regulations ensures smooth operations and legal compliance.

Are you planning to buy gold or start a jewellery business? Ensure you understand the GST implications to optimize your costs and ensure compliance. For step-by-step assistance in GST registration, invoice management, or even gold business licensing, visit kaagazat for professional guidance and support.

Stay informed, buy smart, and grow your gold business compliantly with expert help.