Discover everything about GST on gold in India – current rates, how it affects gold prices, and what buyers and investors need to know in 2025. Stay informed before making a purchase.

Gold has been an integral part of Indian culture and investment strategy for centuries. However, since the implementation of the Goods and Services Tax (GST) in July 2017, the taxation landscape for gold purchases has undergone significant changes.

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Understanding these changes is crucial for both investors and consumers who buy gold regularly.

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What is GST & How Does It Apply to Gold?

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Goods and Services Tax (GST) is a comprehensive indirect tax that replaced multiple taxes like VAT, excise duty, and service tax. It's a destination-based tax levied on the supply of goods and services throughout India.

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For gold, GST applies at different stages:

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• Manufacturing level- When gold is processed into jewellery or coins.

• Retail level– When consumers purchase gold products.

• Import level- When gold is imported into India.

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The key principle is that GST is charged on the value added at each stage of the supply chain, making it a more transparent taxation system.

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GST Rate Structure for Gold Products

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Primary GST Rates

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The design of the GST structure for gold includes specific rates for various components.

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Component	GST Rate	Application
Gold Value	3%	On the actual gold content/weight
Making Charges	5%	On craftsmanship and labour costs
Wastage Charges	5%	On material wastage during manufacturing

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Impact on Different Types of Gold Purchases

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Physical Gold Products

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Gold Product Type	GST Structure	Key Features	Best For
Gold Coins and Bars	Only 3% GST on gold value No making charges No wastage charges	Lower overall tax burden Standard purity guarantee Easy liquidity	Investment purposes
Gold Jewellery and Ornaments	3% GST on gold content 5% GST on making charges 5% GST on wastage	Higher total cost due to craftsmanship Cultural and aesthetic value Lower gold content per rupee	Personal use and cultural purposes
Gold Artifacts and Decorative Items	3% GST on gold content 5% GST on making charges Higher artistic charges	Making charges significantly higher GST on artistic value addition Speciality designs	Decorative and collectable purposes

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Digital Gold Purchases

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Digital Gold Type	GST Structure	Key Features	Best For
Gold ETFs (Exchange Traded Funds)	No GST on purchase or sale Only expense ratio applies Brokerage charges separate	Most tax-efficient investment High liquidity No storage concerns	Large-scale investment
Digital Gold Platforms	3% GST on gold value No making charges Storage: 18% GST (if applicable)	No making charges Instant transactions Small investment amounts possible	Regular small investments
Gold Mutual Funds	No GST on investment Capital gains tax on redemption Expense ratio included	Professional management No direct gold ownership Diversified exposure	Portfolio diversification

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Download the Jar app to start your digital gold saving journey.

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GST Impact on Gold Imports

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India imports approximately 70–80% of its gold requirements, making import taxation crucial for overall pricing.

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Import Structure

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• Basic Customs Duty: 12.5% on gold imports

• Agriculture Infrastructure and Development Cess: 2.5%

• GST on Imports: 3% on landed value (including customs duty)

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Unlike most goods, gold offers almost no GST exemptions—only agricultural tools, export manufacturing, and government purchases qualify, with no relief for religious, investment, or personal purchases.

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Comparison: Pre-GST vs Post-GST Era

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Comprehensive Tax Calculation

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Component	Amount	Pre-GST Tax Structure	Post-GST Tax Structure
		Tax Type \| Rate \| Tax Amount	Tax Type \| Rate \| Tax Amount
Gold Content	₹75,000	VAT \| 1% \| ₹750 Excise \| 1% \| ₹750	GST \| 3% \| ₹2,250
Making Charges	₹20,000	Service Tax \| 15% \| ₹3,000	GST \| 5% \| ₹1,000
Wastage	₹5,000	VAT \| 1% \| ₹50	GST \| 5% \| ₹250
Entry Tax	₹75,000	Entry Tax \| 0.2% \| ₹150	Abolished \| 0% \| ₹0
Total Base Value	₹1,00,000
Total Taxes		₹4,700	₹3,500
Final Cost		₹1,04,700	₹1,03,500

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Tax Evolution Analysis

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Pre-GST Multiple Tax System

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Tax Component	Applicable On	Rate	Rationale	Amount
VAT	Gold + Wastage	1%	State revenue	₹800
Excise Duty	Gold content	1%	Central manufacturing tax	₹750
Service Tax	Making charges	15%	Service provision tax	₹3,000
Entry Tax	Gold value	0.2%	Local entry levy	₹150
Total Pre-GST				₹4,700

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Post-GST Unified System

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Tax Component	Applicable On	Rate	Rationale	Amount
GST on Goods	Gold + Wastage	3%	Unified goods tax	₹2,400
GST on Services	Making charges	5%	Unified service tax	₹1,000
Other Taxes	None	0%	All abolished	₹0
Total Post-GST				₹3,400

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GST implementation on gold resulted in a net benefit to consumers, reducing the total tax burden by ₹1,200 (25.5% tax reduction) on a ₹1,00,000 jewellery purchase while simplifying the complex. The transition from a multi-tax structure to a transparent, uniform system has occurred across India.

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Conclusion

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GST on gold has brought transparency and uniformity to gold taxation in India, though it has slightly increased the overall tax burden compared to the pre-GST era.

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The 3% GST on gold value and 5% on making charges are now standard across the country, eliminating the confusion of multiple state-level taxes.

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For investors, the key is to choose the right gold investment vehicle based on their objectives.

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Physical gold coins and bars remain the most cost-effective option for those wanting physical possession, while digital gold and ETFs offer tax advantages for pure investment purposes.

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Bottom line: While GST has added to the cost of gold purchases, the transparency and uniformity it brings make it easier for consumers to make informed decisions.

Smart buyers should focus on minimising making charges, comparing dealers, and choosing the most appropriate form of gold investment for their specific needs.

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GST on Gold in India: What You Need to Know

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