GST on Gold Jewellery: 18K, 22K & 24K GST Rates, Making Charges & Tax Calculation

Understand the 2025 GST on gold, including 3% (1.5% CGST + 1.5% SGST) on gold value & 5% on making charges. Learn GST calculations, exemptions & investment tips for gold buyers.

The implementation of the Goods and Services Tax (GST) has standardized the taxation on gold across India, marking a significant shift in the gold jewellery sector. A GST rate of 3% ( is now uniformly applied to all gold ornaments, while an additional 5% is levied on the making charges of gold jewellery. This streamlined approach replaces the previous disparate tax structures like VAT and excise duty, simplifying transactions, and enhancing transparency for both buyers and sellers in the gold market.

Since gold is a traditional asset as well as a popular investment, understanding how GST is calculated on gold jewellery, gold ornaments, and digital gold can assist buyers and sellers in staying compliant and managing costs effectively. In this article, you will find information regarding the gst gold rate in 2025 that you need to know.

GST on Gold Ornaments

It is a 3% tax applied to the value of gold and an additional 5% tax on the price of jewellery. It was introduced under India’s GST framework, replacing earlier taxes such as VAT and excise duty, thereby simplifying gold transactions between buyers and sellers.

What Are the GST Rates on Gold? 

Taxes on gold in India vary based on transaction type. Here’s how it works:

1. GST on gold value: GST is applied to all gold purchases, regardless of purity (22-carat, 24-carat, or 18-carat).
2. GST on Making Charges: 5% GST is added to gold jewellery making charges.
3. GST on imported gold: Gold imported into India attracts 12.5% customs duty and 3% IGST on assessable value (gold price + customs duty).

As an example,

• Gold Value: ₹50,000
• Making Charges: ₹5,000
• GST on Gold (3%): ₹50,000 x 3% = ₹1,500
• GST on Making Charges (5%): ₹5,000 x 5% = ₹250

Total GST Payable: ₹1,500 (on gold) + ₹250 (on making charges) = ₹1,750. Tax planning for gold purchases and investments is simplified by this rate structure.

What is the GST on Purchases of Physical Gold? 

Regardless of its form (bars, coins, or jewellery), GST on gold purchases in India are subject to 3% (1.5% CGST + 1.5% SGST). An additional 5% GST is imposed on the making charges for gold jewellery. These taxes have replaced earlier levies such as VAT and service tax, resulting in a uniform taxation system.

What is the GST on Gold Jewellery Making Charges?

In the case of gold jewellery, the making charges are subject to a 5% GST under the GST framework. These making charges are used to cover the cost of the craftsmanship and labor involved in creating the jewelry.

For instance, if the making charges for your jewellery amount to ₹5,000, the GST on making charges would be ₹5,000 x 5% = ₹250. This amount is added to the total cost of the jewellery, along with the 3% GST on the value of gold.

It is important for buyers to be aware of these additional charges when planning gold jewellery purchases. The government streamlined taxation by introducing GST on making charges, ensuring consistency throughout India. To ensure transparency, always inquire with your jeweller if making charges are itemized separately.

What is the GST on Digital Gold?

Digital gold, another popular investment option, is also subject to 3% GST, just like physical gold. GST is applied to the transaction value at the time of purchase for digital gold. Unlike physical gold, digital gold does not involve making charges, so there is no additional GST imposed.

For example, if you purchase digital gold worth ₹50,000, the GST will be ₹50,000 x 3% = ₹1,500, bringing the total cost to ₹51,500. Investors should also be aware that when selling digital gold, any capital gains are subject to income tax as per applicable rates, adding an additional layer of compliance.

Step by Step Guide to GST Calculation on Gold

To calculate the total cost of gold, including GST, follow these steps:

• Step 1: Determine the Gold Value

Start with the market price of gold for the weight and purity you want to purchase. For example, 10 grams of 22-carat gold = ₹50,000.

• Step 2: Add Making Charges

The cost of crafting jewellery is charged by jewelers.

Let’s assume making charges = ₹5,000.

• Step 3: Calculate GST on Gold Value (3%)

GST on the gold value is 3% of ₹50,000: ₹50,000 x 3% = ₹1,500

• Step 4: Calculate GST for Making Charges (5%)

GST on making charges is 5% of ₹5,000: ₹5,000 x 5% = ₹250

• Step 5: Add Everything

Add the gold value, making charges, and their respective GST amounts:

You can calculate your total gold jewellery purchase cost, including GST, by following this simple steps mentioned above.

Calculation: 

Step	Particulars	Calculation	Amount (₹)
1	Gold Price (10 grams, 22-carat)	Given	₹50,000
2	Making Charges (10% of gold price)	₹50,000 x 10%	₹5,000
3	GST on Gold Value (3%)	₹50,000 x 3%	₹1,500
4	GST on Making Charges (5%)	₹5,000 x 5%	₹250
5	Total Cost	Gold + Making Charges + GST	₹56,750

Impact of GST on Gold Prices

In 2017, the GST replaced earlier taxes such as VAT, excise duty, and service tax with a unified 3% GST on gold value and 5% GST on making charges.

• Before GST: Gold buyers paid around 2% VAT and 1% excise duty, resulting in non-uniform pricing and tax evasion.
• After GST: In comparison to pre-GST times, buyers now pay an additional 0.5%-1% in taxes compared to pre-GST days, but the 3% GST made pricing transparent and uniform nationwide. Although GST affected gold buyers, it simplified tax compliance for businesses and encouraged fair trade practices.

Input Tax Credit for Gold Purchases

When gold is used for further production, resale, or business purposes, businesses registered under GST can claim input tax credit. Gold purchases made for personal use are not eligible for ITC. Buyers must have valid tax invoices and comply with GST regulations in order to claim ITCs.

Consideration Before Investing in Gold

• Be aware of GST Rates: Remember, gold attracts 3% GST on its value and 5% on making charges for jewellery. Factor these taxes into your budget.
• Choose Between Physical or Digital Gold: With digital gold, you avoid making charges and only pay 3% GST.
  Check Purity and Certification: Opt for BIS hallmarked gold to ensure authenticity and resale value.
• Invoice Transparency: For clarity and compliance, always insist on a detailed invoice showing the gold price, making charges, and GST separately.
• Monitor Market Prices: To offset GST expenses, buy gold during dips.
• ITC Eligibility: To reduce costs, claim an Input Tax Credit when buying gold for business purposes.

Consider these points when investing in gold to minimize unnecessary costs.

Conclusion on GST Gold Rate

GST on gold affects everyone—whether you’re buying jewellery, investing in digital gold, or running a gold business. A 3% GST is charged on gold value, and 5% GST on making charges for jewellery, which adds to the total cost.

Knowing these GST rates and how GST is calculated helps you plan your purchases better. For businesses, staying compliant with GST rules and using benefits like input tax credit can save money. As gold remains a popular investment in India, understanding GST is important for making smart and cost-effective decisions. Stay informed, calculate carefully, and make the most of your gold investments! To compute GST on gold jewellery, you need the advice of experts such as Vakilsearch Indeed. 

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FAQs About GST on Gold 

What is the GST rate for gold jewellery?

In India, the GST on gold is 3% (1.5% CGST + 1.5% SGST), applicable to all forms including jewellery, coins, and bars. Additionally, a 5% GST is levied on making charges for gold jewellery.

How do I avoid GST on gold jewellery?

GST cannot be avoided on gold jewellery purchases as it is a mandatory tax. However, you can minimize costs by negotiating lower making charges, which attract a 5% GST.

Why is there 3% GST on gold?

The 3% GST on gold replaces previous taxes like VAT, excise duty, and service tax, streamlini/ng taxation and ensuring a uniform system across India.

Is gold GST exempt?

No, gold is not GST-exempt. A 3% GST is applied to gold purchases, and an additional 5% GST is charged on jewellery making charges.

Does gold have 12% GST?

No, gold does not have 12% GST. The GST rate on gold is 3%, and 5% applies only to the making charges for jewellery.