Gold and silver occupy a unique position in India's economy and taxation system. Unlike most consumer products, precious metals involve layered pricing structures including bullion value, making charges, customs duties, and GST implications.

Why Gold Taxation Works Differently: Jewellery transactions combine precious metal value, fabrication charges, exchange transactions, imported bullion, and investment products, each with different GST treatment.

GST Rate on Gold - 3%: Gold and gold jewellery generally attract 3% GST (HSN 7108 for gold, HSN 7113 for jewellery). GST is charged on the taxable value of gold sold.

GST on Making Charges - 5%: Making charges for designing, fabrication, craftsmanship, and stone setting labour attract 5% GST. Invoices should clearly separate gold value and making charges.

GST on Silver - 3%: Silver and silver jewellery generally attract 3% GST under HSN 7106 and HSN 7113 respectively.

GST on Gold Coins and Bars: Gold coins and bars also attract 3% GST. Compliance treatment may vary depending on investment purpose, retail sale, or bullion trading.

A Worked Example: For gold jewellery of Rs. 1,00,000 with making charges of Rs. 10,000, GST would be 3% on gold value (Rs. 3,000) plus 5% on making charges (Rs. 500).

GST on Imported Gold: Imported gold involves customs duty, social welfare surcharge where applicable, and IGST. This significantly affects bullion pricing and jewellery manufacturing cost.

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

GST on Exchange of Old Gold: GST may apply only on the value addition component. Proper valuation records and purchase documentation should be maintained.

Alkesh Patel & Company provides GST advisory, reconciliation review, registration assistance, and compliance support for jewellers and bullion traders across India.

For a detailed comparison, read our guide on GST on diamonds and precious stones. For a deeper look at unique GST categories, see our article on GST on alcohol in India and why liquor is outside the GST framework.