How Much GST on Gold is Charged in India? 2025 Update

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As per the latest update from the Union Budget 2025, the GST on gold is charged at 3% in India, including both 24-carat and 22-carat gold.

Now, everyone around is referring to gold as a "Safe haven"; that is why understanding how much tax you would have to pay is important to know more than ever.

In today's update, you will cover the current GST rates on gold, gold jewelry and GST on making charges as well.

Now, without any further delays, cover everything there is to know about GST on gold in India.

What is GST on Gold in India 2025?

When you purchase gold in India, the Goods and Services Tax (GST) comes into play. GST on gold in India is set at a 3% rate, which is applied to the value of gold, including gold jewellery, coins and bars.

Under Section 7 of the CGST Act (Central goods and service tax), the supply of gold (without any job work) is considered a supply of goods.

Here is a quick look at how GST is applied to different gold products:

GST is also applicable when charging for gold jewelry. In India, a 5% GST is applied to the making charges for custom-made gold jewelry, which is in addition to the 3% GST on the value of the gold itself.

Don’t Miss: What will be the Expected Gold Rate in 2025 in India?

GST Rate on Purchase of Gold in India

The GST rate on gold in India is set at 3% by the Modi government 2.0 (1.5% CSGT + 1.5% SGST) on the total value of the gold you buy.

For example, if you purchase gold worth Rs.1,00,000, the total GST payable is Rs.3000. This gold GST rate is applicable to all forms of gold, including jewellery, coins and bars.

Moreover, a 5% GST is applied on the making charges for gold jewellery.

These new changes in the gold GST rate have simplified taxation and standardized the rates for gold transactions across the country (The earlier tax structure included 1% VAT and 1% service tax).

Here is a list of the revised GST rates on gold for different products:

24 Carat Gold GST Rate

The 24-carat gold GST rate in India is 3% of the gold value, meaning for every Rs.100 worth of purchase made on 24-carat gold, you will pay an additional Rs.3 GST on gold jewellery.

Further note that this GST rate is on the gold itself and a separate 5% GST is charged for making any gold jewellery.

22 Carat Gold GST Rate

In India, the GST (Goods and Services Tax) on 22-carat gold is 3% of the gold’s price. Therefore, for every Rs.1000 worth of 24-carat gold you buy, you will pay an extra Rs.30 as GST. If the gold is made into jewellery, the making charges will have an additional 5% GST.

(Note: The purity of gold will not affect the GST rate, as it is taxed on the value of gold, regardless of its purity).

GST on Digital Gold

The GST on digital gold is 3%, which is the same as the GST taken on any physical gold purchase. As per the records, around 40,000 active users are invested in digital gold as it is more secure, like 65% of millennials prefer digital gold, making it a popular investment in 2025.

GST on Gold Investments

Gold investment options like Gold ETFs, Sovereign Gold Bonds and Gold Mutual Funds do not usually have GST on the gold itself. However, GST will apply to any service charges, management fees or other costs related to these investments. So, investors should be aware that these extra fees might have an 18% GST.

GST on Gold HSN Codes

Firstly, HSN stands for "Harmonized System of Nomenclature," a unique code that classifies 5000+ products worldwide.

Here is a table given below that tells you in detail about the GST on gold HSN codes:

Must Read: Gold Mutual Funds vs. Gold ETF Which One is Best for You?

GST On Physical Gold Purchase

The GST on buying physical gold is also 3%, including the gold bars and coins. And no additional charges are marked on the tax calculated on the total value of the gold.

Let's understand how GST applies to various forms of gold purchases:

GST on Ready-Made Jewellery (Ornaments)

When you buy ready-made gold jewellery, a 3% GST is added to the total cost, including both the gold value and the making charges. This means the gold and the craftsmanship are treated together as one for tax purposes.

GST on Gold Bars and Coins

For gold bars and coins, GST rate is 3% but it only applies to the gold's value, without any extra charges for making them.

GST on Second-Hand Gold

The GST on second-hand gold depends on who is selling it:

• Registered Dealers:If a registered dealer sells second-hand gold, a 3% GST is charged.
• Individuals:Individuals selling second-hand gold usually do not have to pay GST. However, the buyer, usually a registered jeweler, will pay the GST when buying it.

Important Read: Will Gold Rate Decrease in Coming Days in India in 2025?

GST Rate on Gold Jewellery Making Charges

Here is an easy-to-understand breakdown of GST on custom-made jewelry:

1. GST on Custom-Made Jewellery

When you get custom jewelry made using your gold, there are two types of GST involved:

GST on Gold

A 3% GST is charged on the value of the gold you provide.

GST on Making Charges

A 5% GST is charged on the making charges for turning your gold into jewelry.

Let’s understand with the help of an example:

If you buy 10 grams of gold worth Rs.50,000 and the making charges are Rs.10,000, here is how GST works:

• GST on Gold: 1,500 (3% of Rs. 50,000)
• GST on Making Charges: 500 (5% of Rs. 10,000)
• Total GST: 2,000

2. Reverse Charge Mechanism

If the goldsmith (or the person making your jewellery) is not registered for GST, the jeweller or merchant you buy from must pay the 5% GST on the making charges instead. This is known as the Reverse Charge Mechanism.

3. GST on Jewellery Repairs

If you are getting your jewellery repaired, a 5% GST is charged on the repair charges. This is separate from the GST applied when buying ready-made jewellery.

So, in short, when you get custom jewellery made or repair jewellery, you’re paying GST on both the gold and the making/repairing charges.

GST Calculation on Gold

The table below shows the GST calculation on the purchase of gold:

Tax Implications of GST on Gold Investments in India

With the introduction of gold mutual funds, ETFs and Sovereign Gold Bonds (SGBs), it's important to know how taxes apply:

1. Gold ETFs and Mutual Funds
   

   These are usually not subject to GST. However, the gold behind these Mutual Funds still has GST but investors do not have to pay GST directly on the ETF units.

2. Sovereign Gold Bonds (SGBs)
   

   GST only applies to the brokerage fee (18% GST), not on the gold itself.

3. Digital Gold
   

   When you buy digital gold online, a 3% GST is charged, just like when buying physical gold.

In simple terms, while you don’t directly pay GST on the gold in mutual funds or ETFs, you may still face GST on associated fees or services.

To Conclude

To wrap up, the lowering of customs duties and the stable GST on gold put forward a good opportunity for Indian investors to re-evaluate their gold investment strategy in 2025.

Now, if you are still thinking of buying physical gold, that is up to you but if you are thinking of starting a SIP (systematic investment plan), this would be the right time.

Plus, this post got you up to speed with all the updates regarding how much GST is charged in India and the tax implications on various forms of gold purchases.

In our expert opinion, if can dedicate 10% of your portfolio to gold funds. This way, rather than chasing how high gold might reach, use it wisely as a stabiliser and not a growth engine in 2025.

Start Your SIP Today Let your money work for you with the best SIP plans.

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Frequently Asked Questions About GST on Gold in India

1. Is GST Applicable When Selling Old Gold?
   

   No, individuals selling old gold jewellery do not pay GST. The GST responsibility falls on the jeweller who buys the gold.

2. What is the GST on Gold Ornaments?
   

   GST on gold ornaments is 3% of the total value of the jewellery, including both the gold value and making charges.

3. Can I Claim Input Tax Credit (ITC) on Gold Purchases?
   

   Registered jewellers can claim ITC on purchases, including making charges but individual buyers cannot claim ITC.