GST on 24 Carat Gold: Rate, HSN Code and Investment Grade Rules
Table of Contents
A buyer picking up a 24-carat bar sees exactly one tax line on the bill, and it reads 3%. Gst on 24 carat gold is 3% of the gold's value, split as 1.5% CGST and 1.5% SGST on an intra-state sale, and the rate holds whether the purchase is a 999 fineness bar, a coin, or an ornament. Purity does not raise the percentage; a common assumption, and a wrong one, is that purer gold sits in a higher tax slab. Making charges, where a piece involves crafting, take a separate 5%. Pledging gold as loan collateral, for the record, triggers no GST event at all. This guide covers the 24k gold gst rate at a glance, the HSN codes that separate bars from coins and jewellery, two worked calculations for the two kinds of buyer, the rules for investment-grade 999 gold, and where a gold loan fits for holders of high-purity metal.
GST Rate on 24 Carat Gold at a Glance
Four classifications cover nearly every 24-carat purchase, and the table sets out how 24 carat gold tax india buyers actually pay is applied to each.
|
Item |
HSN Code |
GST Rate |
|
24K gold bars and ingots |
7108 |
3% |
|
24K gold coins |
7118 |
3% |
|
24K gold jewellery and ornaments |
7113 |
3% |
|
Making charges on jewellery (job work services are classified under 9988) |
— |
5% |
Note: Rates and classifications shown reflect the prevailing GST structure for gold and are subject to change through official notifications.
The percentage on the gold itself never varies with purity; 18K, 22K and 24K all attract 3% on the metal's value. Buyers reading an itemised bill within their own state will see the 3% presented as two lines of 1.5% each, the CGST and SGST halves that invoicing norms require to be shown separately.
HSN Code for 24 Carat Gold: What Buyers and Sellers Need to Know
An HSN code is the classification number that tells the tax system what a product is. For gold, three codes do most of the work. HSN 7108 covers monetary gold and gold in unwrought or semi-manufactured forms, which includes powder, and it is the primary code for investment-grade bars. Coins sit under their own heading, HSN 7118. HSN 7113 covers jewellery and articles of jewellery.
999 fineness gold, the trade name for 99.9% pure 24-carat metal, falls under 7108 when sold as a bar, 7118 when minted as a coin, and under 7113 the moment it is worked into an ornament. Same metal, different codes, same 3% rate. The hsn code 24k gold products carry matters mainly for the seller's returns and the buyer's records; it does not change what pure gold gst 24k purchasers pay.
|
HSN Code |
Description |
|
7108 |
Gold, unwrought or semi-manufactured: bars, ingots, powder |
|
7118 |
Coin, including gold coins |
|
7113 |
Articles of jewellery in precious metal, including 24K ornaments |
Note: Classifications are indicative of standard usage under Chapter 71; the code applicable to a specific product is stated on the seller's invoice.
How to Calculate GST on a 24 Carat Gold Purchase
Two buyers, two bills. The investor buying a bar meets one tax line; the jewellery buyer meets two. Both examples below assume ₹14,000 per gram for 24-carat gold purely as a working figure, and the day's market rate replaces it in practice.
Example 1: Buying a 24K Gold Bar
Gold value: 10 grams × ₹14,000 = ₹1,40,000.
GST at 3%: ₹1,40,000 × 0.03 = ₹4,200.
Total payable: ₹1,44,200.
No making charges apply to a bar, so the gold bar gst calculation ends with a single tax line. Clean and short. Dealers may charge a small premium over the market rate for minting and packaging, which forms part of the sale price the 3% is applied to.
Example 2: Buying 24K Gold Jewellery with Making Charges
Gold value: 10 grams × ₹14,000 = ₹1,40,000.
Making charges (assumed): ₹6,000.
GST on gold at 3%: ₹4,200.
GST on making charges at 5%: ₹300.
Total payable: ₹1,40,000 + ₹6,000 + ₹4,200 + ₹300 = ₹1,50,500.
Here the buyer sees two GST lines on a proper invoice, one at each rate, and that split is the mark of correct billing for 24k gold jewellery gst. Making charges themselves are not regulated; they vary by jeweller and design, so the making charges gst amount moves with whatever labour figure is agreed.
Investment-Grade 24K Gold: GST Rules for Bars, Coins and 999 Fineness Gold
Investment products built on physical gold share the 3% rate but skip the making-charge layer, since no crafting is involved. The 999 gold gst position across common formats runs as follows. Gold coins sold by banks and authorised dealers carry 3% on the sale price. Digital gold platforms charge 3% at the point of purchase, as the underlying vaulted metal is treated as goods. Sovereign Gold Bonds sit apart: they are securities, not goods, so no GST arises on them, though fresh tranches have not been issued in recent years and existing bonds change hands on exchanges.
Holding rather than selling has its own tax silence. Pledging gold as collateral for a loan is not a supply of goods under GST law, so no GST is charged on the pledge, and the loan disbursement itself is an exempt financial service; only charges such as a processing fee, where levied, attract GST as a service. One caution belongs here for the investment grade gold gst reader: under RBI's 2026 lending directions, bars and ingots are not eligible loan collateral. Ornaments qualify, as do bank-issued coins of 22 carats or higher up to 50 grams, so an investor whose 24-carat holding is jewellery or eligible coins may raise an IIFL Finance gold loan against it without selling, subject to assessment and prevailing guidelines, while a bar must stay in the locker.
Conclusion
One rate carries the whole subject: 3% on the value of 24-carat gold, under HSN 7108 for bars, 7118 for coins and 7113 for ornaments, with 5% reserved for making charges where crafting exists. The two worked examples show how an investor's single-line bill differs from a jewellery buyer's two-line one, and the purity myth falls away once it is clear the percentage never moves with karat. For holders of eligible 24-carat pieces, a gold loan may offer a route to funds with no GST event on the pledge and no sale of the metal, subject to eligibility and applicable guidelines, though bars sit outside the collateral rules. Every figure in this guide is illustrative, and actual prices, premiums, taxes, and loan values depend on the day rate, the product, and the rules operating when the transaction takes place.
Frequently Asked Questions
Is the GST rate on 24 carat gold different from 22 carat or 18 carat gold?
No. The rate on the gold component is 3% for every purity, 18K through 24K, and no purchase moves into a different slab because the metal is purer. Purity shows up in the price per gram instead, which raises the taxable base and therefore the rupee amount of GST, while the percentage stands still. Making charges carry their own 5% where they exist. Comparing a bar invoice with a jewellery invoice makes the parity obvious in seconds.
Does GST apply when I sell or exchange old 24 carat gold?
Generally not on the seller's side. An individual selling personal gold to a jeweller makes no taxable supply, so no GST is charged to the seller, though a registered jeweller taking in old gold as raw material may have obligations of its own under GST rules. In an exchange for new jewellery, GST is typically charged on the value addition; the new gold added plus making charges, rather than on the old gold returned, though the exact treatment depends on how the jeweller documents the exchange. Keeping the original purchase invoice speeds up purity acceptance when old gold is handed in.
What GST does a buyer pay on a 24 carat gold coin purchased from a bank or authorised dealer?
3% on the sale price of the coin, and nothing more. Coins are not crafted jewellery, so no making-charge GST arises, and coins are classified under HSN 7118. The sale price itself may sit slightly above the day's market rate because of minting and packaging premiums, and the 3% applies to that full price. Worth noting for later: bank-issued coins of 22 carats or higher, up to 50 grams, are also within RBI's eligible collateral list for gold loans.
Is there GST on a gold loan taken against 24 carat gold?
No, not on the pledge or the loan. Handing gold over as collateral is not a supply of goods under GST law, so the pledge itself is tax-free, and the disbursement of the loan is an exempt financial service. Where GST can appear is on service charges attached to the loan, a processing fee for instance, which attracts GST at the applicable service rate when levied. Reading the sanction letter's fee schedule shows exactly which charges carry tax.
Can a jeweller claim Input Tax Credit on 24 carat gold purchases?
Yes, within limits. A GST-registered jeweller may claim ITC on the 3% paid on gold bought as input for manufacturing jewellery, provided the credit reconciles against its GSTR-2B. The making-charges side behaves differently: credit on that 5% carries specific restrictions as a service input, so the two credits are not interchangeable. Individual consumers have no ITC route at all; for them the tax is final. Businesses in doubt typically confirm treatment with a tax professional before filing.
Disclaimer : The information in this blog is for general purposes only and may change without notice. It does not constitute legal, tax, or financial advice. Readers should seek professional guidance and make decisions at their own discretion. IIFL Finance is not liable for any reliance on this content. Read more
