Gold is more than just an ornament in India. It’s a store of value, a wedding essential, and a trusted investment. But with rising prices, taxes matter more than ever. Many people forget there’s a GST on gold. It applies not just to the gold but also to making charges—so it can affect your final price.
Let’s understand the GST impact on gold transactions through its effect on making charges, investment structures, and strategies for budget optimisation.
What Is the GST Rate on Gold in 2025?
Consumers must pay GST at 3% of the metal value when purchasing gold in India. The taxes for gold-making charges apply at 5% of the value of jewellery purchases.
Here’s a quick breakdown:
| Type of Charge | GST Rate |
| Physical gold (bars/coins) | 3% |
| Gold jewellery (metal only) | 3% |
| Making charges (craftsmanship) | 5% |
So, if you’re buying gold jewellery, you effectively pay two taxes:
- One on the gold itself (3%)
- One on the making/labour involved (5%)
GST on Gold Making Charges
Customers generally believe their payments cover only the metal value. The fast accumulation of making charges amounts to between 8% and 15% of gold value. GST here is levied at 5%, and this is non-refundable unless you’re a registered dealer.
GST Calculation on Gold: How It Adds Up
| Item | Value (₹) |
| Gold value (10g @ ₹6,000/g) | ₹60,000 |
| Making charges (10%) | ₹6,000 |
| GST on gold (3%) | ₹1,800 |
| GST on making charges (5%) | ₹300 |
| Final Price | ₹68,100 |
So while the advertised rate might be ₹60,000 for 10 grams, you could pay over ₹8,000 extra due to labour and tax.
GST on Digital Gold and Gold ETFs
Investors are turning to digital gold, sovereign gold bonds (SGBs), and gold ETFs.
Let’s look at the tax impact:
| Gold Type | GST Rate | Tax Note |
| Digital Gold | 3% | GST charged at purchase |
| Sovereign Gold Bonds | 0% | No GST; issued by RBI |
| Gold ETFs | 0% | No GST, but brokerage and STT apply |
Platforms like Dhan offer tools to compare such products for cost-efficiency. You can explore resources on Made For Trade for ideas on smarter investing.
Impact of GST on Gold Buyers
While GST revealed clear pricing for gold, it introduced a small cost increase.
Here are a few key outcomes:
- Higher cost at checkout: The imposing tax percentage adds 3–5% to your total checkout expense, regardless of whether gold prices remain constant.
- Increased compliance for jewellers: Most sellers now issue GST-compliant invoices.
- Better invoice transparency: The new system lets buyers precisely view how metal costs compare to manufacturing charges and taxes.
GST on Gold Imports
Gold imported into India includes the following taxes:
| Type of Duty/Tax | Rate |
| Basic Customs Duty (BCD) | 12.5% |
| Agriculture Infrastructure Cess (AIDC) | 2.5% |
| IGST (Integrated GST) | 3% |
How Does GST Affect Gold Investment?
For retail investors, the GST adds friction to physical gold investments:
- No input credit: Retail buyers can’t claim GST as input tax credit
- Lock-in on resale: Selling back to jewellers may result in a loss if the buyback price excludes taxes
- More interest in alternatives: SGBs and ETFs, which have no GST, are gaining traction
How Is GST Calculated on Gold Jewellery?
Here’s a step-by-step process:
- Assess gold rate for the day (e.g. ₹6,000/g)
- Multiply by weight (say 10g = ₹60,000)
- Add making charges (₹6,000 at 10%)
- Apply 3% GST on ₹60,000 = ₹1,800
- Apply 5% GST on ₹6,000 = ₹300
- Final cost = ₹60,000 + ₹6,000 + ₹1,800 + ₹300 = ₹68,100
Tip: Always ask the jeweller for a tax invoice that shows these charges separately.
Are There Any Exemptions Under GST for Gold?
Yes—but mostly for business transactions, not retail buyers. Retail buyers do not get any GST relief on purchase of jewellery or coins.
Exemptions Include:
- Exports of gold jewellery (zero-rated under GST)
- Supply to SEZ units for jewellery manufacturing
- Gold provided for job work (under prescribed rules)
Should You Choose Gold Without Making Charges?
Some platforms offer pure gold coins or digital gold with 3% GST and no making charges. While they don’t have design value, they are better for pure investment purposes.
Consider this:
| Type | GST | Making Charges | Best For |
| Gold jewellery | 3% + 5% | 8–15% | Gifting, wedding |
| Gold coins | 3% | 0–2% | Savings, resale |
| Digital gold | 3% | Nil | Short-term holding |
| Sovereign Gold Bonds | 0% | Nil | Long-term investing |
Know Your Gold Taxes Before You Buy
No matter how long gold creates a dazzling display, permanent taxes will ultimately overshadow it. You must carefully review the transaction’s costs when purchasing gold this year. People should understand their break-up statement while requesting GST invoices for comparison purposes.
Moving from jewellery purchases to buying electronic assets and gold coins can help you save up to a few thousand Indian rupees. In the long run, knowing where the tax bites is just as valuable as knowing when to buy.
