GST on Gold in India 2026: Rates, Making Charges & Calculation Guide
Table of Contents
Every GST Council meeting produces a fresh wave of headlines about gold, and every one of them ends the same way: nothing changed. The gold gst percentage stands where it has since 2017, at 3% on the metal's worth, with labour billed as making charges taxed at 5%, and the sweeping September 2025 slab reform left both figures alone. So, the numbers a buyer needs for 2026 are settled and short. This guide gathers the whole picture in one place: the reference table with HSN codes, two worked calculations covering a jewellery bill and a bar purchase, the treatment of digital gold, ETFs and Sovereign Gold Bonds, the rules on selling and exchanging old gold, and the one question no rate table answers, which is what gst on gold india 2026 rules mean for a household pledging jewellery for a loan.
Gold GST Rate at a Glance: Quick Reference Table
|
Item |
HSN Code |
GST Rate |
|
Gold jewellery and ornaments |
7113 |
3% |
|
Gold bars and ingots |
7108 |
3% |
|
Gold coins |
7118 |
3% |
|
Making charges on jewellery (job work services are classified under 9988) |
— |
5% |
|
Import of gold |
7108 |
3% IGST (plus customs duty) |
Note: Rates and classifications shown reflect the prevailing GST structure for gold and are subject to change through official notifications.
On an in-state purchase the 3% arrives as two halves, 1.5% CGST and 1.5% SGST, itemised on the bill under current invoicing norms. The gold gst rate india applies evenly to every purity, so the karat decides the price per gram and nothing about the percentage.
How to Calculate GST on a Gold Purchase: Step-by-Step
The formula fits on one line: GST on gold = gold value × 3%, and GST on making charges = making charges × 5%. Two examples cover the two kinds of buyer, both using assumed round figures that live rates replace on the day.
Example A: Buying Gold Jewellery with Making Charges
Gold value of the ornament: ₹52,000.
Making charges as billed: ₹5,200.
Tax on the gold: ₹52,000 × 3% = ₹1,560.
Tax on the making: ₹5,200 × 5% = ₹260.
Amount due: ₹52,000 + ₹5,200 + ₹1,560 + ₹260 = ₹59,020.
Total making charges gst plus metal tax comes to ₹1,820 on this gst on gold purchase, about 3.2% of the pre-tax bill, blending the two rates in proportion.
Example B: Buying a Gold Bar or Coin
A bar keeps it to one line. Gold value ₹1,05,000, tax at 3% adds ₹3,150, and the buyer pays ₹1,08,150. No making charges exist on a bar, so no 5% arises anywhere, and a coin follows the identical pattern. The gold bar gst calculation is the shortest sum in this entire subject.
GST on Digital Gold, ETFs, and Sovereign Gold Bonds
Investment routes split cleanly on classification. Digital gold counts as goods, since vaulted metal stands behind each purchase, and carries 3% at the point of sale. Gold ETFs are securities; buying or selling units on an exchange attracts no GST at all. Sovereign Gold Bonds share that exemption as government securities, at issue and at redemption, though fresh tranches have not been offered in recent years and existing bonds trade on exchanges. Gold mutual funds round out the set: the invested amount itself carries no GST, with tax appearing only on fund management fees as a service. The pattern is consistent throughout gst gold jewellery 2026 rules and beyond: physical or vaulted metal is taxed, paper claims on gold are not.
GST When Selling or Exchanging Old Gold
Selling first. An individual handing old gold to a registered jeweller is not making a taxable supply, and nothing is charged to the seller; the jeweller's side may involve reverse-charge treatment depending on circumstances, and that burden sits with the business alone.
Exchange is where bills get creative. The position that generally holds: GST is charged on the value addition, the new gold added plus itemised making charges, rather than on the full worth of the fresh piece, so on a ₹60,000 new ornament bought against ₹35,000 of old gold, the tax is generally computed on the addition when the exchange is documented that way. Some jewellers draw exchange invoices differently in practice, and views on the point genuinely vary in the trade, which makes examining how the bill presents the adjustment the sensible pre-signature step.
Does GST Apply to a Gold Loan?
Not to the loan, and not to the pledge. Placing gold with a lender as collateral involves no supply of goods, so no GST arises when jewellery enters the locker, and the disbursed amount is an exempt financial transaction. Interest carries no GST either. The tax appears only on service charges, a processing or valuation fee for instance, typically at 18% where levied.
Valuation runs on the current market, not the old bill. With an IIFL Finance gold loan, the jewellery is appraised at the branch against the published IBJA benchmark for the day, on net weight and verified purity, so the loan amount reflects what the gold is worth now rather than what was paid for it, GST included, years ago. Subject to assessment and prevailing guidelines, that appraisal is the only number that matters at the counter.
Conclusion
For all the annual speculation, the 2026 position on gold tax is the 2017 position: 3% on the metal in every form, 5% on itemised making charges, exemptions for securities-based routes, and no tax event anywhere in a gold loan. The two worked examples cover practically every purchase a household will make, and the exchange rule rewards a careful look at the invoice. When the same gold later needs to work as capital, a gold loan may draw on its current appraised value with no GST friction at all, subject to eligibility and applicable guidelines. Every figure here is illustrative; in practice, bills, rates, and loan amounts track the day's prices, the specific transaction, and the guidelines in effect when it happens.
Frequently Asked Questions
Is the GST rate the same for 22k and 24k gold?
Yes, 3% across every purity grade sold in India, with no separate slab for higher karats. The carat determines the per-gram price, which shifts the taxable value and therefore the rupee amount of tax, while the percentage itself stays fixed. Making charges attract their 5% regardless of carat too. The persistent belief that purer gold means a higher tax rate has no basis in the rate schedule, and any invoice showing otherwise deserves a second look before payment.
Can a jeweller claim input tax credit on gold purchases?
Yes, within the rules. A registered jeweller buying gold as business input for manufacturing or resale may claim ITC on the 3% paid, subject to conditions under the GST framework and matching against supplier-filed returns. End consumers have no equivalent right; for a household buyer the tax is final. One asymmetry catches businesses out: credit treatment on the making-charges side carries its own restrictions, so the two credits behave differently and are worth confirming with a tax adviser.
What is the GST on hallmark gold jewellery?
The same as on any gold jewellery: 3% against the gold's value plus 5% against the itemised making line. Hallmarking is a purity certification, not a tax category, so the BIS stamp neither raises nor lowers what the buyer pays in GST. The certification fee itself is a service charge settled between the jeweller and the hallmarking centre, taxed at that stage, and typically passed on as a small per-article line on the bill or within pricing. Buying hallmarked therefore costs almost nothing extra in tax while making the piece easier to value at resale or pledge.
Does GST differ when buying gold online versus in a store?
No. The rates attach to the goods, not the channel, so an online order and a showroom purchase both carry 3% on the gold and 5% on itemised making charges, anywhere in India. What can differ online is everything around the tax: delivery and insurance charges, the premium over the metal rate, and return policies. Comparing the all-in price per gram, tax included, is the honest way to weigh an online seller against the neighbourhood jeweller; the GST line will match.
Is GST charged on gold loan processing fees?
Yes. Fees attached to a gold loan, processing and valuation charges among them, are services and attract GST at 18% where levied, calculated on the fee amount alone. The loan itself stays outside the net: no GST on the pledge, none on disbursal, and none on interest, which is exempt as the cost of borrowed money. The sanction letter's fee schedule shows each charge with its tax as a separate line, and a few minutes reading it reveals the full cost before signing.
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
