GST on Gold Jewellery and Ornaments: Rates for 18K, 22K, 24K

Gold has always held a special place in the Indian households, not only as a symbol or sign of wealth and tradition but also as a secure form of investment. From weddings and festivals to gifting and savings, gold jewellery remains integral to Indian culture. However, when purchasing gold ornaments, one factor that significantly impacts the final bill is taxation under the Goods and Services Tax (GST).

Whether you are buying an 18K designer ring, a 22K bridal necklace or a 24K coin, the GST rate is the same. Let’s understand how GST applies to gold jewellery, what official notifications say and how it affects buyers.

Understanding Gold Purity

Before taxation, it’s important to know the difference between 18K, 22K and 24K gold:

• 24 Karat (24K): It is the purest form of gold (99.9%), usually sold as coins and bars. Too soft for intricate jewellery.
• 22 Karat (22K): About 91.6% pure, mixed with copper or silver. Common in Indian traditional ornaments.
• 18 Karat (18K): 75% pure, mixed with stronger alloys. Popular for lightweight, studded or designer jewellery.

Key point: Purity affects the base price of gold but not the GST rate, which is uniform across all purities.

GST Structure on Gold Jewellery

When GST was introduced in July 2017, it replaced the mix of VAT, excise and service tax. The tax treatment now is:

• 3% GST on gold value (metal content) – It applies whether it’s 18K, 22K or 24K.
• 5% GST on making charges – Charged on the labour/design component.
• Imports: Gold imported into India attracts customs duty (currently around 10–15% as per the Union Budget) plus 3% Integrated GST (IGST). This raises the wholesale cost, which impacts retail prices.
• Exports: Gold jewellery exports are zero-rated under GST, meaning no GST burden on overseas buyers.

GST Rates on Ornaments (Other than Gold)

1. Apart from gold, ornaments made of other materials fall under different HSN codes and GST slabs:

• Gold & Silver Jewellery (HSN 7113):

2. 3% GST on the metal value + 5% on making charges (similar treatment for silver jewellery).

• Imitation Jewellery (HSN 7117):

3. Fashion or costume jewellery made of base metals, beads, plastic, glass or artificial stones attracts 12% GST.

• Precious & Semi-Precious Stones (HSN 7101–7106):
1. Unworked/rough stones & pearls: 0.25% GST
2. Cut and polished stones: 3% GST

This means that while gold and silver jewellery benefit from relatively low GST, imitation jewellery and decorative ornaments fall under higher slabs, making them more expensive post-GST.

Special Cases & Exemptions

• Old jewellery resale by individuals: Generally, not subject to GST.
• Exchange of old jewellery for new: GST is usually applied only on the value difference (new minus old). Treatment can vary depending on how jewellers raise invoices.
• Digital gold: Purchase of digital or paper gold attracts 3% GST, though making charges do not apply.

How GST is Calculated – Examples

Example 1: 24K Gold Coin (10 grams, no making charges)

• Gold value = ₹6,000 × 10 = ₹60,000
• GST @ 3% = ₹1,800
• Final Price = ₹61,800.

Example 2: 22K Necklace (50 grams + making charges)

• Gold value = ₹5,500 × 50 = ₹2,75,000
• Making charges = ₹4,000
• GST on gold (3% of ₹2,75,000) = ₹8,250
• GST on making (5% of ₹4,000) = ₹200
• Final Price = ₹2,87,450.

Example 3: 18K Designer Ring (10 grams + making charges)

• Gold value = ₹4,500 × 10 = ₹45,000
• Making charges = ₹1,500
• GST on gold (3% of ₹45,000) = ₹1,350
• GST on making (5% of ₹1,500) = ₹75
• Final Price = ₹47,925.

Notice that GST treatment does not vary by purity. The formula is always 3% on gold + 5% on making charges.

Why This GST Structure?

The GST Council designed the system to:

1. Simplify taxation – Replaced multiple state taxes with one nationwide structure.
2. Prevent double taxation – separate treatment of gold value and making charges avoids cascading taxes.
3. Improve transparency – Invoices must show gold price, making charges and GST separately.
4. Encourage exports – zero-rated GST on exports keeps Indian jewellery globally competitive.

Impact on Buyers

• Slightly Higher Costs – Before GST, taxes were around 1–2%. Now, buyers pay 3% on gold + 5% on making.
• Transparent Billing – Invoices are detailed, making costs clearer for buyers.
• Crafted Jewellery is Costlier – Higher making charges mean higher GST burden.
• Old Gold Exchange Helps – Exchanging jewellery can reduce GST liability.
• Stable GST Rates – while customs duties change often, GST on gold has remained at 3%.

Tips for Buyers

• Always insist on a BIS-hallmarked invoice with GST breakup.
• Compare making charges across jewellers, they vary widely.
• Exchange old jewellery to cut down GST outflow.
• Time purchases during festivals or dips in gold price.

Disclaimer

GST on gold jewellery is currently 3% on gold value + 5% on making charges, regardless of purity. This structure has brought uniformity and transparency to the jewellery sector.

However, GST law is subject to periodic updates through CBIC notifications and GST Council decisions. Buyers and jewellers should check the various latest government circulars or consult with the tax professionals before making large purchases. For any assistance in GST related cases, do contact to Remind Legal experts, they will help you in all corporate compliances.

FAQs on GST and Gold Jewellery

1. Is 24K gold taxed more than 22K or 18K?

No. The GST rate is the same across all purities.

2. Do I pay GST when buying jewellery from another state?

Yes. GST applies as CGST + SGST (within the same state) or IGST (interstate purchase).

3. Is digital gold also taxed?

Yes, at 3% GST, but no making charges apply.

4. Can I avoid GST by paying in cash?

No. Every legitimate sale must include GST billing.

5. How does GST work in old gold exchange?

Usually, GST is charged only on the net value difference. Always ask your jeweller for clarity on invoices.