GST Rate for Gold Jewellery - Updated 2026 Slab & HSN Details

Direct Answer – GST Rate and HSN Code for Gold Jewellery

For businesses dealing in Gold Jewellery in India, the applicable GST rate is 3 % CGST + 3 % SGST (or 6 % IGST for inter‑state sales). The corresponding HSN Code is 7103 (Gold jewellery, whether or not plated or clad with precious metal). This rate has been effective since 1 July 2017 when GST was implemented nationwide.

Item	GST Rate	HSN Code	Effective Date
Gold Jewellery (including gold‑plated items)	6 % (CGST 3 % + SGST 3 % / IGST 6 %)	7103	1 July 2017

GST Calculator for Gold Jewellery

Enter the base price (exclusive of GST) to see the total GST amount and the final price inclusive of GST.

function calculateGoldGST() { var base = parseFloat(document.getElementById('goldBasePrice').value) || 0; var gstRate = 0.06; // 6% total GST var gstAmount = base * gstRate; var total = base + gstAmount; document.getElementById('goldGSTResult').innerHTML = 'GST Amount: ₹' + gstAmount.toFixed(2) + ' | Total Price (incl. GST): ₹' + total.toFixed(2); }

Detailed Tax Breakdown for Gold Jewellery

Understanding the tax structure helps jewellery manufacturers, retailers, and exporters optimise cash flow and remain compliant with the Indian GST framework. Below is a granular view of the tax components, including the regular GST regime and the optional composition scheme.

Regular GST Regime (Normal Taxpayer)

Under the regular regime, a gold jewellery business must charge and remit the full GST rate of 6 % on every taxable supply. The tax is split equally between Central GST (CGST) and State GST (SGST) for intra‑state transactions, or as Integrated GST (IGST) for inter‑state supplies.

Tax Component	Rate	Applicable Scenario
CGST	3 %	Intra‑state sales (within the same state)
SGST	3 %	Intra‑state sales (within the same state)
IGST	6 %	Inter‑state sales (between different states)

Composition Scheme for Small Gold Jewellery Enterprises

Businesses with an aggregate turnover of up to ₹1.5 crore (as of FY 2023‑24) can opt for the Composition Scheme. Under this scheme, the GST rate on gold jewellery is reduced to **1 %** (applied on the turnover, not on each invoice). However, certain conditions apply:

• The business cannot claim Input Tax Credit (ITC) on purchases.
• Sales must be made within the same state; inter‑state sales are not permitted under the composition scheme.
• The supplier must issue a **Composition Scheme Invoice** with a distinct format, mentioning “Composition Taxpayer” and the applicable rate.
• The scheme is not available to manufacturers who produce gold jewellery in the form of semi‑finished articles for export.

Scheme	GST Rate	ITC Eligibility	Turnover Limit	Key Restrictions
Regular GST	6 %	Yes	Unlimited	None
Composition Scheme	1 %	No	₹1.5 crore	No inter‑state sales, no ITC, specific invoice format

Special Conditions and Exemptions

While gold jewellery is generally taxable, certain scenarios attract exemptions or reduced rates:

• Export of Gold Jewellery: Zero‑rated (0 % GST) provided the exporter has a valid Export Promotion Capital Goods (EPCG) licence or obtains a Letter of Undertaking (LUT) from the tax authorities.
• Gold Jewellery for Religious Ceremonies: No specific GST exemption; however, charitable trusts receiving donations of gold jewellery may be eligible for exemption under Section 13(2) of the CGST Act, subject to proper documentation.
• Gold Jewellery sold as part of a ‘Bundle’ with services (e.g., wedding planning): The tax rate is determined by the dominant component; usually, the jewellery portion remains at 6 %.

GST Calculator for Composition Scheme

If you are eligible for the composition scheme, use the calculator below to estimate the payable tax on your turnover.

function calculateCompGST() { var turnover = parseFloat(document.getElementById('compBaseTurnover').value) || 0; var compRate = 0.01; // 1% composition tax var tax = turnover * compRate; document.getElementById('compGSTResult').innerHTML = 'Composition Tax Payable: ₹' + tax.toFixed(2) + ' (1 % of turnover)'; }

Comparison with Pre‑GST Tax Regime for Gold Jewellery

Before the introduction of GST on 1 July 2017, gold jewellery in India was subject to a mosaic of indirect taxes, including Central Excise Duty, State Value Added Tax (VAT), and Service Tax on certain ancillary services. Understanding the shift helps businesses appreciate compliance simplifications and cost implications.

Pre‑GST Tax Structure (Before 2017)

• Central Excise Duty: Levied at 10 % on the value of gold jewellery manufactured in the country.
• State VAT: Varied from 5 % to 12 % depending on the state. Some states, like Maharashtra and Karnataka, applied a higher VAT on luxury items.
• Service Tax: Applied at 14 % on services such as jewellery design, repair, and certification.
• Additional Cesses: Certain states imposed cesses for heritage conservation or local development.

Impact of GST Consolidation

Aspect	Pre‑GST	Post‑GST (Regular)	Post‑GST (Composition)
Effective Tax Rate on Sale	10 % + 5‑12 % VAT = 15‑22 %	6 % (CGST 3 % + SGST 3 % / IGST 6 %)	1 % (Composition)
Number of Returns	Multiple (Excise, VAT, Service Tax)	One (GSTR‑1, GSTR‑3B)	One (Quarterly CMP‑3)
Input Tax Credit (ITC)	Limited, fragmented across taxes	Full ITC on inputs (subject to conditions)	No ITC
Compliance Cost	High (multiple registrations, audits)	Moderate (single portal)	Low (simplified returns)
Inter‑state Trade	Complex (different state VAT rates)	Uniform IGST rate	Not permitted under composition

Practical Example: Pricing a 10 gram Gold Necklace

Assume the current market price of 24 karat gold is ₹5,500 per gram. The intrinsic gold value of a 10 gram necklace is ₹55,000. Adding a typical making charge of 20 % (₹11,000), the pre‑GST price is ₹66,000.

• Pre‑GST Scenario: Excise (10 % of ₹66,000) = ₹6,600; State VAT (10 % average) = ₹6,600; Total tax ≈ ₹13,200. Final price ≈ ₹79,200.
• Post‑GST Regular: GST (6 % of ₹66,000) = ₹3,960; Final price = ₹69,960.
• Post‑GST Composition: Tax (1 % of ₹66,000) = ₹660; Final price = ₹66,660 (no ITC, but lower tax burden).

This illustration shows that GST has significantly reduced the tax component, making gold jewellery more competitively priced, especially for small retailers who opt for the composition scheme.

Frequently Asked Questions (FAQs) on Input Tax Credit and Compliance for Gold Jewellery

Can a gold jewellery retailer claim Input Tax Credit (ITC) on purchases of raw gold?

Yes, under the regular GST regime, a retailer can claim ITC on the GST paid on the purchase of raw gold, gold alloys, and other inputs, provided the following conditions are met:

• The supplier has issued a valid tax invoice with the correct HSN code (7103).
• The goods are received and accounted for in the retailer’s books of account.
• The retailer files GSTR‑1 and GSTR‑3B within the prescribed timelines.
• The goods are used for taxable supplies (i.e., sale of gold jewellery) and not for exempt or non‑taxable activities.

What happens if I mix composition‑scheme sales with regular‑scheme sales?

Mixing the two schemes in a single business is prohibited. A taxpayer must choose one scheme for the entire business. If a composition‑scheme taxpayer wishes to transition to the regular scheme, they must:

1. File a formal application to the jurisdictional GST officer before the start of the next financial year.
2. Cease composition‑scheme invoicing from the date of transition.
3. Begin filing GSTR‑1 and GSTR‑3B as a regular taxpayer.

Is GST applicable on gold jewellery sold at auctions?

Yes. Auction sales are treated as a supply of goods. The auctioneer, acting as the supplier, must charge GST at the applicable rate (6 %) on the winning bid amount and issue a tax invoice to the buyer.

How is GST accounted for when gold jewellery is exported?

Exports are zero‑rated (0 % GST). To claim a refund of input tax credit, the exporter must:

• Obtain a valid Letter of Undertaking (LUT) or pay IGST and later claim a refund.
• File GSTR‑1 with the export details and GSTR‑3B reflecting zero‑rated supplies.
• Maintain shipping bills, customs documents, and the LUT for audit purposes.

Are there any special compliance requirements for jewellery designers offering custom design services?

Custom design services are considered a “service” under GST. If the service is bundled with the sale of jewellery, the tax rate of the dominant component (usually the jewellery) applies. However, if the design service is provided independently (e.g., consultancy), it is taxed at 18 % (CGST 9 % + SGST 9 %). Proper segregation on the invoice is essential to avoid disputes.

What penalties apply for late filing of GSTR‑3B for a gold jewellery business?

Late filing attracts a penalty of ₹100 per day (₹50 CGST + ₹50 SGST) for each day of delay, subject to a maximum of 10 % of the tax payable. Persistent defaults may lead to interest under Section 50 of the CGST Act and possible suspension of the GST registration.

Compliance Tips – Common Billing Mistakes in the Gold Jewellery Segment

Even seasoned jewellery merchants occasionally stumble over GST compliance. Below are actionable tips to avoid the most frequent errors:

• Incorrect HSN Code: Always use 7103 for gold jewellery. Using a generic code like 9999 can trigger a notice from the tax department.
• Mismatched Invoice Details: Ensure the invoice shows the correct GSTIN of both supplier and recipient, the exact rate (6 % or 1 % for composition), and a clear description such as “24 K Gold Necklace – Making Charges Included”.
• Failure to Separate Service Charges: If you charge design or repair services separately, list them as distinct line items with the appropriate 18 % rate.
• Omitting GST on Inter‑State Sales: For sales across state borders, charge IGST at 6 % and do not split it into CGST/SGST.
• Not Updating the Rate for New Financial Year: GST rates for gold jewellery have remained stable, but always verify any amendments announced in the Union Budget or GST Council meetings.
• Neglecting Input Tax Credit Documentation: Retain all purchase invoices, payment vouchers, and shipping bills. Failure to produce these during an audit can lead to denial of ITC.
• Using Composition Invoices for Inter‑State Transactions: The composition scheme disallows inter‑state sales. If a transaction crosses state lines, you must revert to the regular GST regime for that sale.

Quick Compliance Checklist

Task	Frequency	Key Requirement
Issue Tax Invoice	Every sale	Correct HSN (7103), GSTINs, rate, and description
File GSTR‑1	Monthly (by 11th of next month)	Report outward supplies, include export details if any
File GSTR‑3B	Monthly (by 20th of next month)	Declare tax liability, claim ITC, pay due GST
Reconcile ITC	Monthly	Match purchase invoices with GSTR‑2A/2B
Maintain Records	5 years	Invoices, payment proofs, shipping bills, LUTs

Conclusion – Strategic Takeaways for Gold Jewellery Entrepreneurs in India

The introduction of GST has streamlined the tax landscape for the gold jewellery industry, reducing the overall tax burden from a pre‑GST composite of 15‑22 % to a uniform 6 % (or 1 % under the composition scheme). By correctly applying the HSN Code 7103, leveraging Input Tax Credit where eligible, and adhering to the compliance checklist, businesses can optimise cash flow, improve pricing competitiveness, and avoid costly penalties.

Staying abreast of periodic GST Council updates, monitoring changes in the market price of gold, and employing simple tools like the embedded calculators can further enhance operational efficiency. Whether you are a small family‑run jeweller opting for the composition scheme or a large manufacturer engaged in interstate and export trade, a disciplined approach to GST compliance will safeguard your brand’s reputation and contribute to sustainable growth in India’s vibrant gold jewellery market.