India's diamond and jewellery industry operates under specialised GST rules that differ significantly from ordinary retail taxation. Understanding GST applicability is important as it directly affects pricing, invoice structure, export treatment, Input Tax Credit eligibility, and compliance obligations.

GST Rates on Diamonds at a Glance: Rough diamonds (HSN 7102) attract 0% GST. Cut and polished diamonds attract 1.5% GST. Diamond jewellery attracts 3% GST. Semi-precious stones may attract 0.25% GST. Lab-grown diamonds are classified based on transaction structure.

Rough Diamonds - 0% GST: This exemption supports India's position as a major diamond processing hub. Businesses must still maintain proper documentation and valuation records.

Cut and Polished Diamonds - 1.5% GST: The reduced rate supports the diamond processing and export industry. Diamond traders should maintain accurate invoice segregation between rough and polished inventory.

Diamond Jewellery - 3% GST: GST is generally applied on jewellery value, diamond value, and precious metal value. Making charges may attract separate treatment depending on invoice structure.

Semi-Precious Stones - 0.25% GST: Applicable treatment depends on stone category, processing stage, classification, and transaction nature.

Exports and SEZ: Diamond and jewellery exports may be treated as zero-rated supplies, potentially qualifying for refund of accumulated ITC subject to documentation and compliance.

Input Tax Credit for Jewellers: Registered jewellers may claim ITC on eligible business purchases subject to valid tax invoices, supplier compliance, and proper reconciliation.

Alkesh Patel & Company assists diamond traders, jewellers, and jewellery businesses with GST advisory, audit support, reconciliation review, and compliance management.

For more on precious metal taxation, see our article on GST on gold and silver in India including making charges treatment. Also see our guide on GST on alcohol in India for how different product categories are taxed outside the standard framework.