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

Learn about GST on gold in India in 2025, including tax on gold ornaments, making charges, and digital gold. Get a detailed breakdown of GST calculations.

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% (1.5% CGST + 1.5% SGST) 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.

GST Rates on Gold

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.

What is the 24 Carat Gold GST Rate in India?


The GST rate for 24-carat gold in India is 3%. This rate applies to both gold jewelry and gold coins, and is consistent across various forms of 24-carat gold.

For example, if you purchase a 24-carat gold coin weighing 10 grams for ₹50,000 with a 5% making charge (₹2,500), the total value becomes ₹52,500. The GST applied will be ₹1,575 (3% of ₹52,500), making the final cost ₹54,075.

What is the 22 Carat Gold GST Rate in India?


In India, the GST rate for 22-carat gold is 3%. This rate applies to gold jewelry and ornaments made of 22-carat gold, including gold coins and other items.

For instance, if you buy a 22-carat gold necklace weighing 50 grams for ₹1,50,000 with a 5% making charge (₹7,500), the total value becomes ₹1,57,500. The GST charged will be ₹4,725 (3% of ₹1,57,500), bringing the final price to ₹1,62,225.

What is the 18 Carat Gold GST Rate in India?


The GST rate for 18-carat gold in India is also 3%. This rate applies to gold items made from 18-carat gold, including jewelry, coins, and other forms of 18-carat gold.

For example, if you purchase an 18-carat gold bracelet weighing 20 grams for ₹40,000 with a 5% making charge (₹2,000), the total value becomes ₹42,000. The GST applicable will be ₹1,260 (3% of ₹42,000), making the final cost ₹43,260.

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 

Still have questions? Below are answers to the most common queries people have about GST on gold, helping you understand the rates, making charges, and purchase guidelines with clarity.

What are the GST rates on gold?

The GST rate on gold in India is 3%, consisting of 1.5% CGST and 1.5% SGST. It applies to all forms of gold, including jewellery, coins, and bars. For a ₹1,00,000 purchase, GST is ₹3,000.

What is the GST on 22kt gold?

The GST on 22kt gold is 3% of the gold's value. Additionally, a 5% GST is applied on making charges for gold jewellery. These rates apply uniformly across India, ensuring transparency in pricing.

How much tax do you pay on 1 gram of gold?

Post-GST, you pay a 3% GST on the gold value, 5% on making charges, and 12.5% import duty on 1 gram of gold. Previously, there was 1% sales tax, with no tax on gold making charges or GST on the gold value.

Why is there a 3 percent GST on gold?

The 3% GST on gold replaces the earlier 1% VAT and 1% service tax, introduced to discourage gold imports into the country. The higher charges are aimed at reducing gold import dependency.

How to buy gold without GST?

In India, purchasing gold without paying GST is illegal, as GST is mandatory on all gold purchases. Exceptions include gold bought through specific government schemes or sovereign gold bonds, which may be GST-exempt.

What is the price of 1kg gold today?

The price of 1 kilogram of 24 Karat gold in Chennai is ₹8,945,000, or ₹8,945 per gram. For 22 Karat gold (91.6% purity), the price is ₹8,201 per gram.

How much tax do you pay on 1 gram of gold?

Post-GST, the tax on 1 gram of gold includes a 3% GST on the gold value, 5% GST on making charges, and 12.5% import duty. Previously, there was 1% sales tax and no GST on the gold value.

What are making charges on gold?

Making charges on gold range from 3% to 25%, depending on the value of the gold. Wastage charges typically range from 5% to 7%. These charges are negotiable, and simple designs tend to have lower making charges.

How do you calculate gold making charges?

To calculate gold making charges, determine the current market price of gold, the weight of the jewelry, and the making charge (either a fixed amount per gram or a percentage of the gold's value). Add the making charges to the gold’s value and GST to get the final price.

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.

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.