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When you buy gold jewellery, you don’t just pay for gold—you also pay tax. Yet, most buyers don’t clearly understand how GST on gold jewellery is calculated, what part is taxed at 3%, and why making charges attract a different rate. This confusion often leads to overpayment, wrong billing, and disputes with jewellers.
In this guide, we explain GST on Gold Jewellery in simple, layman English—using real-life examples, common mistakes, and practical tips based on issues we regularly handle at Charteredhelp, Noida.
Latest Updates on GST on Gold Jewellery (2026)
GST on gold remains 3% across India.
Making charges continue to attract 5% GST.
Customs duty on imported gold has been reduced in recent budgets, which impacts base price—but GST structure remains unchanged for buyers.
Hallmarked jewellery follows the same GST rules.
In short:
3% GST on value of gold
5% GST on making charges
What is GST on Gold Jewellery?
Under GST law, gold is treated as “goods.” When you buy jewellery, two components exist:
Value of gold
Service of making/designing the jewellery
That’s why:
Gold value → 3% GST
Making charges → 5% GST
Many people believe that “GST is 3% on the total bill.” That is partly true for ready-made jewellery, but in custom jewellery, both components are shown separately.
GST Rates on Gold Jewellery – Quick Table
| Particular | GST Rate |
|---|---|
| Gold (jewellery, bars, coins) | 3% |
| Making charges on jewellery | 5% |
| Repair of jewellery | 5% |
| Second-hand gold (by registered dealer) | 3% |
| Exchange by individual | Usually no GST on old gold |
GST on Gold Making Charges
This is where most confusion happens.
GST on gold making charges is 5%.
It is charged on the labour/design part, not on the gold value.
Why are Making Charges Taxed Separately?
Because making jewellery is treated as a service.
Services attract higher GST than goods.
So your bill normally looks like this:
Gold value – 3% GST
Making charges – 5% GST
Example – How GST is Calculated on Jewellery Bill
You buy a necklace:
Gold value: ₹1,00,000
Making charges: ₹15,000
GST:
On gold: 3% of ₹1,00,000 = ₹3,000
On making: 5% of ₹15,000 = ₹750
Total GST = ₹3,750
Final Bill = ₹1,18,750
Many jewellers wrongly apply 3% on the full amount, which may seem cheaper but is technically incorrect in custom orders.
GST on Different Types of Gold Purchases
Ready-Made Jewellery
For showroom-ready ornaments, jewellers often treat it as a composite supply and charge 3% on the full value. This is accepted practice.
Gold Coins & Bars
Only gold value exists.
GST = 3% on total price.
Second-Hand / Old Gold
If you sell old jewellery as an individual – No GST on you
If a registered dealer sells second-hand gold – 3% GST applies
Exchange of Old Gold with New Jewellery
Common belief: “No GST on exchange.”
Reality:
Old gold given by you → No GST
New jewellery making charges → 5% GST
Additional gold value added → 3% GST
Real Client Scenarios from Charteredhelp
At Charteredhelp, we regularly see these cases:
Case 1 – Overcharged GST
A Noida-based bride was charged 3% GST on the full bill + 5% again on making charges.
She paid double tax unknowingly. We helped her recover the excess amount.
Case 2 – Jeweller Using Wrong Rate
A local jeweller charged 18% GST on making charges assuming it is a “design service.”
Correct rate is 5%, not 18%. The customer saved ₹9,000 after clarification.
Case 3 – Business Buyer Confusion
A jewellery reseller purchased gold without GST invoice.
Later, he couldn’t claim ITC and faced compliance issues during audit.
These problems happen because people don’t understand GST on gold jewellery clearly.
Common Mistakes People Make While Buying Gold Jewellery
Not asking for a proper GST invoice
Accepting “inclusive price” without tax breakup
Paying 18% GST on making charges
Assuming no GST on exchange jewellery
Buying from unregistered sellers
Not verifying HSN codes
Businesses missing Input Tax Credit
Practical Tips Before Buying Gold Jewellery
Always ask for GST breakup
Verify:
Gold value – 3%
Making charges – 5%
Insist on a GST invoice
For high-value purchases, compare 2–3 jewellers
Avoid cash-only deals without tax invoice
If you are a business buyer, ensure the seller is GST-registered
These simple steps can save thousands.
Impact of GST on Gold Buyers
Gold became costlier compared to pre-GST era
Pricing is more transparent
Interstate purchase is easier
Black-market transactions reduced
Buyers now have legal proof for resale & insurance
FAQs – GST on Gold Jewellery in India
GST on gold jewellery is 3% on the value of gold. In addition, 5% GST is charged on making charges.
Yes. Gold value attracts 3% GST, while making charges attract 5% GST. Both appear separately on a proper invoice.
No GST is charged on the old gold given by you. However, GST is applicable on the value of new gold added (3%) and on making charges (5%).
No. The GST rate on gold remains 3% regardless of purity—22K, 24K, or any other carat.
No. GST is mandatory on gold purchases from registered jewellers. Avoiding GST usually means buying without a legal invoice, which is risky.
Yes. Gold coins and bars attract 3% GST on their total value.
No. Individuals selling personal gold jewellery do not pay GST. The liability, if any, lies with the registered jeweller.
Only GST-registered businesses can claim ITC. Individual buyers cannot claim ITC on gold purchases.
For ready-made jewellery, some jewellers treat it as a composite supply and charge 3% on the full value. For custom jewellery, GST should be split—3% on gold and 5% on making charges.
Ensure the invoice clearly shows:
Value of gold
Making charges
3% GST on gold
5% GST on making charges
Jeweller’s GST number
Need GST Registration or Help with Gold Taxation?
Charteredhelp – Your Trusted GST Partner in Noida
Call now: +91-9266685656
