As of the latest amendment (effective 1 July 2023), the Goods and Services Tax (GST) applicable to pure gold (both jewellery and investment forms) in India is 3 %. The relevant HSN (Harmonised System of Nomenclature) code for gold jewellery is 7113, while un‑plated gold (bullion, coins, bars) falls under 7108. Below is a quick reference table:
| Category | GST Rate | HSN Code | Effective Date | Description | Special Conditions / Exemptions |
|---|---|---|---|---|---|
| Gold Jewellery (24 K, 22 K, 18 K, etc.) | 3 % | 7113 | 1 July 2023 | Finished jewellery items made of pure gold, including rings, necklaces, bangles, etc. | Exempt from composition scheme; input tax credit (ITC) available for registered dealers. |
| Un‑plated Gold (bullion, coins, bars) | 3 % | 7108 | 1 July 2023 | Pure gold articles intended for investment or trade, not processed into jewellery. | ITC available; subject to purity verification under BIS standards. |
Enter the base price (in INR) to see the total GST amount and final price inclusive of tax.
Gold, being a high‑value commodity, is primarily taxed under the regular GST framework. The composition scheme, which allows small taxpayers to pay tax at a fixed percentage of turnover, is not applicable to gold jewellery dealers because the goods are classified as “luxury items” and are expressly excluded from the scheme.
The total effective rate remains 3 % irrespective of the transaction’s nature (intra‑state or inter‑state). The split is important for compliance because input tax credit (ITC) can be claimed separately for CGST and SGST/IGST.
The composition scheme is limited to businesses with an annual turnover of up to ₹1.5 crore (as of FY 2023‑24) and excludes certain categories, including:
Consequently, gold dealers must register under the regular GST regime, maintain detailed invoices, and file monthly returns (GSTR‑1, GSTR‑3B) to claim ITC.
Because the tax component is modest (3 %), the overall impact on gold’s market price is relatively low compared to other commodities. However, the compliance burden—especially for small jewelers—can affect cash flow. Proper accounting for CGST and SGST ensures that the dealer can recover the full tax paid on inputs such as:
Use the same calculator above for any gold transaction, whether it is jewellery or bullion. The calculation automatically applies the 3 % total GST.
Before GST was introduced on 1 July 2017, gold was subject to a complex web of central and state taxes. Understanding the shift helps businesses appreciate the simplifications and the new compliance responsibilities.
| Tax Type | Rate | Applicable To | Key Compliance Requirement |
|---|---|---|---|
| Central Excise Duty | 0 % (exempt for gold jewellery) | Manufactured gold articles | Excise returns (E‑Form) for manufacturers. |
| Service Tax | 14 % + Cess (on services like design, polishing) | Service providers to jewelers | Service tax returns (S‑Form). |
| State VAT | Varied (5‑12 % depending on state) | Sale of gold jewellery within a state | State‑specific VAT filings. |
| Octroi/Entry Tax | 2‑5 % (on inter‑state movement) | Goods entering a state | Local municipal clearances. |
Analysts estimate that the GST regime reduced the effective tax burden on gold jewellery by approximately 1‑2 % compared to the combined pre‑GST taxes. However, market dynamics, such as global gold price fluctuations and domestic demand during festivals (e.g., Diwali, Akshaya Tritiya), continue to play a larger role in final retail prices.
Yes. Registered dealers can claim ITC on the GST paid for:
ITC must be claimed in the same tax component (CGST, SGST/UTGST, IGST) as it was paid. For example, CGST paid on a purchase can only be set off against CGST liability.
The liability arises at the time of supply. For a jeweller buying raw gold, GST is payable on the purchase invoice. When the jeweller sells finished jewellery, GST is collected from the customer and remitted to the government in the subsequent return period.
Exports are treated as zero‑rated supplies (0 % GST). Exporters can claim a refund of the ITC accumulated on inputs (raw gold, packaging, freight). Proper export documentation (shipping bill, foreign invoice) is mandatory to qualify for the refund.
Implement a robust accounting software that automatically populates GSTIN, HSN codes, and tax splits. Conduct monthly reconciliations between purchase invoices and the GSTR‑2A portal. Train staff on the mandatory fields for tax invoices and maintain a checklist for export documentation.
Under the CGST Act, penalties range from 10 % of the tax due to a fixed amount of ₹10,000, depending on the nature of the default (e.g., failure to issue invoice, incorrect HSN, late filing). Repeated violations may attract prosecution.
Gold purchased for personal use is still a taxable supply. However, if an individual (non‑registered) buys gold from a retailer, GST is embedded in the retail price and the buyer cannot claim ITC. The retailer must issue a tax invoice with the GST amount shown.
Interest on gold‑secured loans is considered a financial service and is exempt from GST. The principal amount (the gold itself) is a supply of goods and remains taxable at 3 % when the loan proceeds are used to purchase gold.
Immediately contact the supplier to rectify the HSN code, GSTIN, or tax amount. If the correction is not possible, you may have to reject the invoice for ITC purposes and retain it as a “non‑creditable” purchase.
Enter the total base value of all gold items in your invoice to compute the aggregate GST.
The GST rate on pure gold (jewellery and investment forms) is 3% as of 1 July 2023.
Gold jewellery is classified under HSN code 7113.
Un‑plated gold such as bullion, coins, and bars falls under HSN code 7108.
The amendment took effect on 1 July 2023.
No, both gold jewellery and gold bullion are taxed at the same GST rate of 3%.
