Gold has always been more than just a precious metal in India. It represents wealth security, emotional value, cultural importance, and long-term financial planning. Families purchase gold during weddings, festivals, inheritance planning, and even for emergency savings. Because of this strong relationship, even a small change in taxation directly affects millions of buyers every year. Understanding GST on Gold in India 2026 is therefore essential for anyone planning to buy gold jewellery, coins, bars, or digital gold.

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Many buyers focus only on the daily gold rate without paying attention to taxes and additional charges. However, GST, making charges, and service fees can significantly increase the final invoice amount. Without proper knowledge, consumers may overpay or misunderstand billing structures. A clear understanding of GST helps buyers budget accurately, compare jewellers confidently, and make smarter investment decisions.

This guide is designed to provide practical, research-backed, and easy-to-understand information about GST on gold purchases in 2026. Whether you are a first-time jewellery buyer or a long-term investor, knowing how GST works protects your money and improves your buying confidence.

What Is GST on Gold in India?

GST on gold is the indirect tax charged on the purchase, sale, and supply of gold and gold-related services in India. It is a consumption-based tax, which means the final buyer pays the tax at the time of purchase. GST replaced multiple earlier taxes such as VAT, service tax, and excise duty, bringing uniformity across all states.

Under the current system, gold attracts 3 percent GST on the value of gold. This applies to physical gold like jewellery, coins, and bullion bars. Jewellery purchases also include an additional GST on making charges, which increases the total payable cost. Understanding both these components is essential for calculating the final price before buying.

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GST applies uniformly across purity levels such as 24K, 22K, and 18K. The percentage does not change with karat; only the gold price changes. This uniform rate simplifies calculations but still requires awareness of service-based taxes that accompany jewellery purchases.

How GST Changed Gold Taxation in India

Before GST, gold purchases were subject to different state taxes, including VAT and service tax. These taxes varied across regions, leading to inconsistent pricing and confusion among buyers. GST replaced this fragmented system with a single nationwide structure.

The transformation brought several major benefits:

• Uniform tax rate across all states
• Transparent billing and invoicing
• Elimination of cascading taxes
• Easier compliance for jewellers
• Predictable pricing for consumers

Although the visible tax percentage slightly increased compared to some earlier VAT structures, GST improved clarity and reduced hidden tax layers. Buyers can now estimate costs more accurately without worrying about state-wise variations.

Key Highlights of GST on Gold in India 2026

Understanding the main points helps both buyers and businesses plan purchases and investments effectively.

• GST on physical gold purchase remains 3 percent nationwide
• Jewellery making charges attract 5 percent GST
• Digital gold purchases also attract 3 percent GST
• Gold ETFs and Sovereign Gold Bonds are not taxed on gold value
• Service and management fees in investment schemes attract 18 percent GST
• Customs duty reductions have lowered import costs significantly
• Jewellers can claim Input Tax Credit on business purchases
• Margin scheme applies to second-hand gold transactions
• Exchange of old gold attracts GST only on new value difference
• Uniform HSN codes ensure consistent classification

GST Rate on Gold in India

Physical gold remains the most common form of purchase in India. Whether buying ornaments, coins, or bullion bars, GST applies uniformly at 3 percent of the gold value. This rate does not vary with purity but changes with the price per gram.

For example, if the gold value is ₹1,00,000, GST will be ₹3,000. This straightforward structure allows buyers to calculate tax easily before visiting a jewellery store. However, jewellery purchases usually include labour charges, which attract additional GST.

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GST on 24 Carat Gold in India

24 carat gold is the purest form of gold and is mainly purchased for investment rather than daily wear. GST on 24K gold is 3 percent of the total value. Since 24K gold is generally sold as coins or bars, there are usually no making charges involved. This makes tax calculation simpler and more predictable for investors who prefer bullion purchases for transparency and lower additional costs.

GST on 22 Carat Gold in India

22 carat gold is widely used in jewellery because it balances purity and strength. GST on 22K gold is also 3 percent on the gold value. However, jewellery purchases involve making charges, which attract separate GST. Even though purity differs from 24K, the tax percentage remains identical. This uniformity ensures buyers can easily estimate taxation regardless of karat level while still considering labour costs separately.

GST on Gold Jewellery in India

Gold jewellery attracts two separate GST components, which many buyers overlook when estimating the final cost.

• 3 percent GST on the gold value
• 5 percent GST on making charges

Making charges vary depending on design complexity, craftsmanship, and brand value. For designer or heavy bridal jewellery, these charges can significantly increase the invoice amount. Buyers should always request a detailed bill showing gold value, making charges, and GST breakdown. Transparent billing prevents overcharging and builds trust between buyers and jewellers while ensuring accurate budgeting.

GST on Gold Coins and Bars in India

Gold coins and bullion bars attract 3 percent GST on their purchase value. Since these forms usually do not include labour or design costs, GST remains limited to the gold price alone. Investors often prefer coins and bars for this reason because the total cost remains predictable and free from additional service taxation. Coins and bars are therefore considered cleaner investment instruments from a taxation perspective.

GST on Digital Gold in India

Digital gold purchases are treated similarly to physical gold under GST regulations. A 3 percent GST applies to the total investment value. This includes bundled service costs such as insurance, storage, and trustee fees. Although digital gold offers convenience and flexibility, taxation remains equivalent to tangible gold purchases. Investors should therefore compare both physical and digital options while considering storage safety, liquidity, and tax implications.

GST on Gold Investment Schemes in India

Gold investment instruments such as Gold ETFs, Sovereign Gold Bonds, and gold mutual funds do not attract GST on the gold value itself. However, service charges, brokerage, and management fees attract 18 percent GST. Investors benefit from lower tax exposure on gold value but must account for administrative costs when calculating overall returns. Understanding this distinction helps investors choose the most cost-efficient gold investment method.

Customs Duty on Gold Import in India 2026

While GST applies to domestic gold purchases, customs duty plays an equally important role in determining the final retail price of gold in India. Since India imports a large portion of its gold demand, any change in import duty directly impacts market prices, jewellery store rates, and bullion trading values.

Customs duty is charged when gold enters the country from international markets. This duty is paid by importers, refiners, or authorised agencies, and the cost is later reflected in consumer pricing. Even though buyers do not directly pay customs duty at jewellery counters, they indirectly bear its effect through higher gold rates.

The import taxation structure includes two main components:

• Basic Customs Duty (BCD)
• Agriculture Infrastructure and Development Cess (AIDC)

In addition to these, Integrated GST (IGST) at 3 percent applies on imported gold. Therefore, imported gold experiences layered taxation before reaching the retail market.

Revised Customs Duty Structure on Gold

The Indian government reduced customs duty in recent years to stabilise domestic prices and reduce illegal imports. Lower import duty benefits consumers by keeping gold rates closer to international prices while ensuring legal trade remains competitive.

Indicative Customs Duty Structure

Duty Type	Previous Rate	Revised Rate
Basic Customs Duty	10%	5%
AIDC	5%	1%
Total Duty (Gold Bars)	15%	6%

For gold dore, which is semi-refined gold used by refiners, the total duty remains slightly lower. These revisions significantly reduced the overall import burden, making gold purchases more affordable for consumers while maintaining regulatory oversight.

Difference Between Imported Gold and Domestic Gold Taxation

Domestic gold purchases attract only 3 percent GST, while imported gold attracts customs duty plus IGST before entering retail supply chains. This layered taxation structure makes imported bullion slightly costlier at the wholesale level. However, retail consumers usually see only the final adjusted price rather than the duty breakdown.

This is why fluctuations in import policy often cause price volatility even if GST percentages remain unchanged. Buyers tracking daily gold rates should understand that import duty changes influence pricing more than GST variations.

Gold HSN Code Under GST

HSN, or Harmonised System of Nomenclature, is an internationally recognised classification system used to categorise goods for taxation and trade purposes. Under GST, gold and gold-related products fall under specific HSN codes, ensuring uniform tax treatment across India.

Common Gold HSN Codes

HSN Code	Product Description	GST Rate
7108	Gold bars, ingots, bullion	3%
7113	Gold jewellery and parts	3%
7114	Other gold articles	3%

For consumers, HSN codes mainly appear on invoices as transparency indicators. For jewellers and traders, correct classification is critical for filing accurate GST returns, claiming tax credits, and avoiding compliance penalties.

GST Calculation on Gold Purchase

Understanding GST calculation helps buyers estimate the real cost of gold before visiting a store. The final price includes gold value plus applicable taxes. Jewellery purchases add making charges, which significantly influence the total bill.

• Example: GST Calculation on 10 Grams Gold
  

Particulars	Before GST Regime	Under GST Regime
Base Gold Price	₹1,00,000	₹1,00,000
Service Tax	₹1,000	Nil
VAT	₹1,010	Nil
GST at 3%	Nil	₹3,000
Total Value	₹1,02,010	₹1,03,000

This example shows how GST simplified the earlier multi-tax system while making taxation more transparent. Jewellery purchases may further include 5 percent GST on making charges, which increases the final payable amount.

GST on Gold Making Charges in India

Making charges represent labour and craftsmanship costs added to jewellery pricing. These charges vary based on design complexity, craftsmanship quality, and brand reputation. GST treats making charges differently from the gold value.

• GST on Gold Value: 3 percent
• GST on Making Charges: 5 percent

For instance, if the gold value is ₹1,00,000 and the making charges are ₹12,000, GST will be ₹3,000 on the gold plus ₹600 on the making charges. This dual taxation structure often surprises first-time buyers. Asking for a detailed bill helps avoid billing misunderstandings and supports better budgeting.

Input Tax Credit (ITC) for Gold Businesses

Input Tax Credit allows registered businesses to offset GST paid on purchases against GST collected on sales. For jewellers and gold traders, ITC plays a crucial role in maintaining profitability and ensuring compliance efficiency.

ITC Availability Conditions

• Available on raw gold purchases used for resale or manufacturing
• Available on job-work and labour charges
• Available when purchasing from registered suppliers
• Not available on promotional gold gifts or incentives
• Not available when using margin scheme for resale

Individual consumers cannot claim ITC because it is reserved for GST-registered businesses engaged in commercial activities. Understanding ITC ensures jewellers maintain accurate financial records and remain compliant with GST regulations.

Margin Scheme for Second-Hand Gold

The margin scheme is a special GST provision for second-hand gold transactions. When a dealer buys old jewellery from an individual and resells it without altering purity or form, GST applies only on the profit margin, not the full sale value.

How the Margin Scheme Works

• GST charged only on positive profit margin
• No GST if resale price is lower than purchase price
• ITC cannot be claimed under this scheme
• Primarily used by second-hand jewellery dealers

This scheme prevents double taxation and encourages recycling of old gold while ensuring fair taxation practices for businesses.

GST on Exchange of Old Gold Jewellery

Exchanging old jewellery for new ornaments is common in India. GST treatment depends on the billing structure. If old gold is exchanged and only the value difference is paid, GST applies only to the new gold portion, not the entire value.

This approach prevents double taxation and benefits consumers upgrading jewellery. However, transparent billing and accurate weight verification are essential to ensure compliance and avoid disputes between buyers and jewellers.

E-Way Bill and Gold Transportation

Gold transportation within India generally enjoys exemption from standard e-way bill generation under Chapter 71 of GST provisions. However, specific systems allow voluntary e-way bill creation for secure logistics and insurance tracking. Businesses transporting large quantities of gold often generate documentation for safety and compliance purposes even when not legally mandatory.

Importance of Transparent Billing and Compliance

Transparent billing protects both buyers and businesses. For consumers, it ensures accurate pricing and prevents overpayment. For jewellers, it strengthens credibility, reduces legal risk, and simplifies audit procedures. Every gold invoice should clearly display:

• Gold purity and weight
• Rate per gram
• Making charges
• GST breakdown
• Total payable amount

Maintaining clarity in invoices improves trust, enhances financial awareness, and supports lawful gold trading practices.

GST on Gold Exports from India

Gold exports are treated differently from domestic sales under GST law. When gold jewellery, coins, or bullion are exported outside India, the supply is classified as zero-rated. This means the transaction is taxable, but the tax rate is effectively zero. Exporters do not charge GST to international buyers, which helps Indian gold products remain competitive in global markets.

However, exporters must still comply with documentation and filing procedures. They can claim refunds for GST paid on raw materials, labour, and manufacturing inputs. This refund mechanism prevents tax accumulation and supports the growth of India’s jewellery export industry, which contributes significantly to foreign exchange earnings.

GST Refund on Gold for Businesses

GST refunds are primarily available to GST-registered businesses engaged in manufacturing, resale, or export activities. Individual consumers buying gold for personal use are not eligible for GST refunds. Refund eligibility depends on how gold is used and whether the transaction qualifies under business or export provisions.

Businesses may claim refunds in situations such as:

• Export of gold jewellery or bullion
• Excess tax payment due to filing errors
• Accumulated input tax credits on zero-rated supplies
• Inverted duty structures affecting profitability

Refund claims require accurate documentation, invoice verification, and timely filing of GST returns. Maintaining proper purchase records and supplier compliance is essential to ensure smooth refund processing.

GST on Gold for Individual Buyers vs Businesses

Understanding the difference between individual and business taxation is essential for financial planning. Individual buyers purchasing jewellery or bullion for personal use bear the full GST cost without credit benefits. Businesses, on the other hand, can offset GST through input tax credits when gold is used for resale or manufacturing.

Individual Buyers

• Pay GST at time of purchase
• Cannot claim ITC
• GST becomes part of final cost
• Suitable mainly for personal or investment purchases

Business Buyers

• Eligible for ITC if GST-registered
• Can offset tax paid on purchases
• Must maintain compliance and accurate invoicing
• Suitable for jewellers, traders, and manufacturers

This distinction ensures that GST functions as a consumption tax rather than a business burden.

Practical Buying Tips to Reduce GST Impact

Although GST is unavoidable on gold purchases, buyers can adopt smart strategies to manage total costs and avoid unnecessary expenses. Awareness and planning play a major role in reducing financial strain during large jewellery purchases.

• Compare making charges across multiple jewellers
• Choose simpler designs to reduce labour costs
• Purchase coins or bars for lower service taxation
• Request a complete invoice breakdown before payment
• Avoid impulse buying during peak festive markups
• Verify purity through BIS hallmark certification

These practical measures help consumers optimise their spending while ensuring transparency and legal compliance.

GST on Gold Transportation and Compliance

Gold transportation within India is generally exempt from mandatory e-way bill generation under Chapter 71. However, many businesses voluntarily generate documentation for security, insurance, and logistics tracking. Proper documentation protects shipments from delays, disputes, or verification challenges during interstate movement.

For high-value shipments, secure transport services, insurance coverage, and digital tracking systems are recommended. Compliance strengthens supply chain credibility and reduces operational risks for gold businesses.

Common Mistakes Buyers Should Avoid

Many buyers unintentionally overspend due to limited awareness of GST structures and billing practices. Avoiding these mistakes ensures financial clarity and protects long-term investment value.

• Ignoring GST on making charges
• Failing to request invoice transparency
• Confusing digital gold service fees with GST rates
• Assuming GST varies by state
• Overlooking purity verification
• Not comparing jewellers before purchase

Being informed helps buyers maintain control over their spending and ensures a fair transaction.

Final Thoughts

Gold purchases often represent emotional milestones and long-term financial planning. Understanding GST on gold in India 2026 empowers buyers to make well-informed decisions, estimate budgets accurately, and negotiate with confidence. Transparent billing, awareness of making charges, and knowledge of tax structures reduce financial surprises and strengthen buyer trust.

For businesses, GST compliance ensures credibility, smoother audits, and better profit management. Whether you are buying jewellery for a wedding, coins for savings, or bullion for investment, awareness of GST ensures that every purchase aligns with both emotional satisfaction and financial responsibility.

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