GST on Gold Purchase in India 2025

In India, gold is not just a metal; it is considered a symbol of tradition, prosperity, and security. From weddings to festivals, buying gold is an important part of our culture. Also, many people also choose it as a safe investment, especially when there is volatility in the market. But when it comes to buying gold, one thing that cannot be ignored is GST, i.e., Goods and Services Tax. Since the implementation of GST in the year 2017, it has had a direct impact on the prices of gold. Now, while buying gold, not only its price but also "GST on Gold" has to be paid.

Currently, GST on gold in India is applicable at a fixed rate, which we will understand in detail further. It is very important to know what the gold GST rate is and how it affects your pocket. In this blog, we will tell you how much GST is applicable on different types of gold, how it is calculated, and what things you should keep in mind while buying.

Current GST Rates on Gold in 2025

Since the implementation of GST (Goods and Services Tax) in India, there has been transparency in gold prices, but at the same time the tax burden on consumers has also increased. While buying gold, you should not only pay attention to its per-gram rate, but it is also important to keep in mind the GST charges levied on it.

What are the GST rates applicable to?

The Government of India has imposed GST on two main things on gold:

• The actual price of gold (gold value)

• Making charges, which are part of designing, labor, and processing.

Applicable GST rates on gold in India in 2025 (in CGST + SGST format):

Let's understand with an example:

Suppose you buy a 22 carat gold jewellery worth Rs.50,000 and there is a Rs.5,000 making charge on it:

3% GST on gold price = Rs.1,500

• CGST = Rs.750

• SGST = Rs.750

5% GST on making charge = Rs.250

• CGST = Rs.125

• SGST = Rs.125

Total GST = Rs.1,750 (Rs.875 CGST + Rs.875 SGST)

GST on 24K, 22K and 18K Gold

Buying gold in India is not just a hobby or tradition, but it is also a financial decision. Whether you buy in the form of jewellery or invest in coins and biscuits, GST rates directly impact your spending. Hence, it is important to know how much tax is levied on 24K, 22K and 18K gold and how it is calculated.

If you are buying gold only for investment, then 24 carat gold is suitable and only 3% GST is levied on it. But if you are buying gold in the form of jewellery, then 22 carat gold not only attracts 3% GST on the price of gold, but also an additional 5% tax on making charges. Therefore, it is very important to understand the total cost of GST while buying gold.

How GST is Calculated on Gold Purchases

When you buy gold, you not only pay the price per gram but also have to add the applicable tax and making charges. Let's understand how GST on gold purchase is calculated.

Formula for Calculating GST:

Final Price = (Gold Rate × Weight) + Making Charges + GST

Where,

GST = (Gold Value + Making Charges) × GST Rate

Please note:

• Gold attracts 3% GST (1.5% CGST + 1.5% SGST).

• 5% GST is applicable on making charges.

Let’s understand with an example:

Suppose, you bought 10 grams of 24 carat gold at Rs.9.534 per gram, and the making charge is Rs.500 per gram:

Thus, when you buy gold, not just the rate but also taxes and making charges affect the total price. So understanding gold GST and knowing how to calculate GST for gold is the hallmark of a savvy buyer.

GST Rules and Compliance for Gold Sellers

Gold trading in India is a large and organized industry. But after the implementation of GST, tax and compliance related responsibilities have also increased in this sector. If you do business of jewellery or buy and sell gold, then it is mandatory for you to follow the following GST rules and procedures.

1. GST Registration (GST Registration Obligation): According to Section 22 of the GST Act, if the annual turnover of a trader is more than Rs. 40 lakh (Rs. 20 lakh in some special category states), then it is mandatory for him to register under GST.  It is also necessary for jewellery traders to file regular GST returns after registration.

2. Invoicing rules and billing (Proper GST Invoicing Standards): It is mandatory to issue a tax invoice as per GST rules at the time of every sale. This invoice should clearly mention the following details:

• Purity of gold purchased (e.g. 24K, 22K, 18K)

• Weight and unit rate

• Making charge details

• Breakup of applicable GST rates (CGST + SGST)

Invoicing ensures transparency and maintains customer trust.

3. Eligibility for Input Tax Credit (ITC): If the trader is paying GST on his inward supplies (such as purchase of raw gold or bullion), he can claim Input Tax Credit (ITC).

• ITC is applicable only to those transactions that are recorded in the official accounting books.

• ITC on GST collected on making charges can be claimed only if the supplier is also registered under GST and the invoice is valid.

Note: ITC cannot be claimed on a customer's personal purchase of jewellery.

4. Penalties for Non-Compliance: Non-compliance with GST rules can lead to the following consequences for traders:

• Penalty up to Rs.10,000 or 10% of the tax amount (whichever is higher)

• Possibility of license cancellation

• ITC denial and recovery with interest

Hence, it is extremely important for gold traders to file their tax returns on time and maintain proper records.

Impact of GST on Gold Prices and Industry

After the implementation of GST (Goods and Services Tax) in India in July 2017, almost every industry was affected, and the gold and jewellery industry was also not untouched by it. From the prices of gold to the rules of its trade, everything changed. Let us understand in detail one by one:

1. Price Increase After GST: Before the implementation of GST, the total tax rate on gold was around 1.2%. This included:

• 1% VAT (Value Added Tax)

• and about 0.2% excise duty.

After GST:

• 3% GST has been fixed on gold (1.5% CGST + 1.5% SGST).

• Also, 5% GST is levied on the making charges of jewellery.

This has led to an average increase of 2–3% in the total price, as now the customer has to pay tax on the making charges along with the gold.

2. Transparency & Accountability Improved: Before the implementation of GST, many times gold transactions were done through cash transactions and without bills. But after the introduction of GST:

• It has become mandatory to provide a bill on every sale.

• The government gets information about every transaction digitally.

• This has curbed tax evasion and has also increased consumer confidence.

Now the customer knows how much tax he has to pay, and the trader has to do clear reporting.

3. Impact on Gold & Jewellery Industry: 

Impact on small traders: 

• GST registration, digital invoicing and filing of monthly returns were initially a bit difficult for small jewelers.

• Many unorganized traders had to come into the organized system.

Benefit to big brands:

• Branded jewelry companies benefited as customers now prefer shops with reliable bills.

• This has made the entire industry more organized and transparent.

Change in demand:

• When GST was implemented, there was a decline in demand for some time as prices had increased.

• But gradually consumers accepted it and now the market is stable.

Tips to Save GST on Gold Purchase

When buying gold in India, you have to pay 3% GST on the price of gold and 5% GST on the making charges. But with some smart measures, you can reduce the impact of this tax or avoid it to some extent:

1. Shop during festivals or offers: Jewellery shops often offer discounts on making charges during festivals. This helps you pay less GST because the reduction in making charges also reduces the tax levied on it.

2. Invest in Digital Gold or Gold ETF Smart Investment with Rupeezy: If you want to buy gold for investment purpose rather than just jewelry, then digital gold, gold ETF (Exchange Traded Fund) and gold mutual funds are better options.

Digital Gold:

• You can buy it even in small amounts.

• It is 24 carat pure gold, which is stored in a 100% secure vault.

Gold ETF and Mutual Funds:

• These are traded on the stock exchange and there is no making charge on them.

• Taxation is also less than physical gold.

• Capital gains tax can also be exempted if kept for a long time (Indexation Benefit).

You can easily invest in the top gold ETFs and gold mutual funds on Rupeezy. We are a SEBI-registered brokerage platform that provides investors with a secure, transparent, and digitally easy investment experience.

3. Choose options with low making charges: Instead of buying high-end design jewellery, buy simple designs or biscuit/coin gold, which have very low or no making charges.

4. Buying gold without GST – is it possible?

If you ask "how to buy gold without GST", then legally it is not possible in India. GST is mandatory on all types of gold. But the tax cost can be reduced with the above options.

Conclusion

Buying gold in India is a big investment, so it is important to understand the GST (Goods and Services Tax) levied on it. Currently, 3% GST (1.5% CGST + 1.5% SGST) is levied on physical gold such as 18 carat, 22 carat and 24 carat gold. If you buy jewellery, then 5% GST has to be paid separately on the making charge. So while buying gold, pay attention not only to the design and weight, but also to the tax breakup and always take the bill. This will enable you to pay the right price and there will be transparency regarding tax. If you want to buy gold from an investment perspective, then choose digital options like Gold ETFs, Mutual Funds and Sovereign Gold Bonds (SGBs). These are free from making charges and also attract less tax. Rupeezy is a trusted brokerage platform where you can easily invest in Gold ETFs and Gold Mutual Funds, that too with complete transparency and security.

FAQs

Q. How much GST on gold?

A total of 3% GST is applicable on gold in India. It is divided into two parts: 1.5% CGST and 1.5% SGST. This rate applies equally to all types of gold: 18, 22 and 24 carats.

Q. Is GST applicable on making charges of gold?

Yes, if you buy jewellery then 5% GST has to be paid on the making charges as well. This tax is levied separately from the price of gold and increases the overall cost.

Q. Can we claim GST on gold purchase for personal use?

If you have bought gold for personal use, then the GST paid on it cannot be claimed. ITC (Input Tax Credit) is available only on gold bought for business use or sale.

Q. How to buy gold without GST?

It is not legally possible to buy gold in India without GST. However, options like Sovereign Gold Bonds (SGBs) or digital gold have a slightly better tax situation.

Q. How much gold can a person own?

There is no prescribed limit, but there should be proper documentation as per the source of income. According to the CBDT, ownership of up to 500 grams for married women, 250 grams for unmarried women and 100 grams for men is not questioned.

Q. How to calculate gold rate with GST?

Price of gold + 3% GST + making charges (if jewellery) + 5% GST on making charges = Total amount. Example: If the price of gold is Rs.50,000, then 3% GST = Rs.1,500. If making charges are Rs.5,000, then 5% GST = Rs.250. Total = Rs.56,750.

Q. How to invest in gold without tax?

Sovereign Gold Bonds (SGBs) are the best way. The returns received on maturity (8 years) are tax-free. Apart from this, Gold ETFs also have tax planning options.

Q. What is the GST rate for 24 carat gold?

24 carat gold also attracts the same 3% GST as other carats. This tax is levied on the selling price, be it bars, coins or digital gold.