GST on Gold Jewellery in India: Rate, HSN Code and Invoice Rules (2026)

The paper matters nearly as much as the ornament. Gst on gold jewellery is charged at 3% on the gold's value and 5% on making charges, and a correctly drawn invoice shows both as separate lines, with the jewellery classified under HSN 7113 and outsourced crafting services under 9988. Get the bill right and everything downstream gets easier, from a future exchange to a resale to a pledge. Get it wrong, or accept a vague one, and the ornament's own paperwork works against its owner. This guide covers the gold jewellery gst rate table, a worked calculation with both common billing methods, the exchange rule with a numeric example, the full HSN code set, a field-by-field invoice checklist, the input tax credit position, and what the whole tax layer means at a gold loan counter.

GST Rates on Gold Jewellery at a Glance

Note: Rates shown reflect the prevailing GST structure for gold and are subject to change through official notifications.

Uniformity is the rule. 18K, 22K and 24K ornaments face the identical 3%, with the karat affecting only the price per gram. On an in-state bill the metal's tax appears as 1.5% CGST alongside 1.5% SGST, itemised per current norms, and the gst on gold ornaments never varies by city or channel.

How to Calculate GST on a Gold Jewellery Purchase

Take an ornament with a gold value of ₹65,000, five grams at an assumed ₹13,000 per gram for illustration, and making charges billed flat at ₹3,000. The gst rate on gold arithmetic runs:

Tax on the metal: ₹65,000 × 3% = ₹1,950.
Tax on the making: ₹3,000 × 5% = ₹150.
Total GST: ₹2,100. Final bill: ₹70,100.

Now the second common billing style, where making charges come as a percentage of gold value. At 10%, the making line becomes ₹6,500, its tax ₹325, and the bill closes at ₹73,775. Same ornament, different labour quote, and the tax follows the labour figure mechanically. Either way, the day's actual gold rate replaces the assumption here, and the making charges gst always keys off whatever labour amount the invoice states.

GST When Exchanging Old Gold for New Jewellery

The exchange counter carries persistent confusion worth settling with numbers. 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, since an individual handing in personal jewellery makes no taxable supply. So on new jewellery worth ₹40,000 purchased against ₹20,000 of old gold, the tax is generally computed on the ₹20,000 addition, which is ₹600 at 3%, plus 5% on any making charges, where the exchange is documented that way. The exact treatment depends on how the jeweller structures and presents the bill, and practice genuinely varies in the trade, so the gst on old gold exchange treatment on any given invoice deserves a look before signing.

HSN Codes for Gold and Gold Jewellery

Note: Classifications are indicative of standard usage under Chapter 71; the code applicable to a specific product is stated on the seller's invoice.

The gold jewellery hsn code a buyer will see most is 7113, and every registered jeweller must quote it on the invoice. The hsn 7113 gold classification is what tells the tax system a finished ornament was sold rather than raw metal, and its absence from a bill is a fair reason to pause.

GST Invoice Rules for Gold Jewellery

A compliant jewellery invoice carries seven things, and checking them takes under a minute:

The supplier's GSTIN.
Invoice number and date.
Buyer's name and address.
The HSN code, 7113 for jewellery.
Gold value and making charges as separate line items.
The rate and tax amount against each line, 3% on the metal and 5% on the making.
The CGST and SGST amounts shown individually, or IGST on an inter-state sale.

On movement of gold, a quirk worth knowing: goods under Chapter 71 sit under a special exemption from the usual e-way bill requirements, with rules applying only where specifically notified, and a few states have notified their own intra-state thresholds. For a retail buyer, though, the gst invoice gold jewellery checklist above is the document that matters, since it doubles as the ornament's identity papers, recording weight, purity, and price for every future transaction.

Input Tax Credit (ITC) for Gold Jewellery Businesses

Registered jewellers may claim credit on the GST paid on raw gold and other inputs used in manufacturing, subject to the standard conditions and return-matching. End consumers cannot; for them, both taxes are final. The trade lives with one built-in asymmetry: a jeweller outsourcing crafting pays 5% on the karigar's job work under code 9988 while charging only 3% output tax on a composite-billed piece, an inverted rate structure in which credits can accumulate, and managing that is a genuine consideration in the input tax credit gold jewellery equation. It explains, in part, why itemised billing suits jewellers as much as buyers.

How GST Affects the Value of Pledged Gold

It does not add a rupee. A lender assessing pledged jewellery works from net weight multiplied by verified purity multiplied by the applicable IBJA-linked benchmark rate, and neither the making charges nor any GST paid at purchase enters that multiplication. The tax-inclusive bill records what the ornament cost; the appraisal records what its metal is worth today, and the two numbers can sit far apart. IIFL Finance offers gold loans on jewellery in the 18 to 22 karat purity range, subject to assessment and prevailing guidelines, and holding the original itemised invoice helps the process along since weight and purity arrive pre-documented. Realistic expectations start with knowing the gold jewellery value and the bill value are different figures.

Conclusion

Two rates, five codes, seven invoice fields. That is the working knowledge a jewellery buyer needs: 3% on the metal under 7113, 5% on itemised making charges, value-addition taxation on properly documented exchanges, and an invoice that separates every component cleanly. The bill drawn correctly at purchase becomes the ornament's passport for years, easing exchanges, resales, and pledges alike. And when the jewellery is asked to raise funds, a gold loan may price it on today's assessed metal value, untouched by the taxes once paid over the counter, subject to eligibility and applicable guidelines. Nothing here is a quoted rate: bills, prices, and loan amounts in practice follow the day's market, the piece itself, and the guidelines applicable when the transaction occurs.

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