GST on Silver in India 2026: Rates, HSN Code and Calculation Guide
Table of Contents
Silver has had a loud couple of years on price, and a very quiet one on tax. The silver gst percentage in India is 3% on the metal's value under HSN 7106, covering every form from raw bullion and bars to coins and jewellery, with making charges on jewellery carrying 5% where itemised, and no cess of any kind on top. The rate has stood unchanged since GST replaced the old patchwork of excise duty and state-wise VAT, and the September 2025 slab reform left silver exactly where gold sits, on the special 3%. This guide covers the rate against its pre-GST past, the full HSN sub-code table, two worked purchases with the formula, the input tax credit split between traders and households, and the points that matter to an investor, including what silver is worth as loan collateral.
Silver GST Rate at a Glance: What Is the Percentage?
3% on the metal, whatever its shape. A silver bar, a coin, a raw lot of bullion and a pair of anklets all carry the identical rate on their metal value, and jewellery adds 5% on the making charges when the invoice itemises them. No compensation cess applies to silver in any form, and the silver tax 3 percent figure splits into the usual CGST and SGST halves on an in-state bill.
The before-and-after explains why the flat rate was welcomed. Pre-GST, silver carried roughly 1% excise plus around 1% VAT, with the VAT differing state to state, so the same bar priced differently across borders. One national 3% replaced all of it, and a buyer in Kochi and a buyer in Kanpur now face the same gst on silver purchase arithmetic to the rupee.
HSN Code for Silver: Full Rate Table (HSN 7106)
|
Silver product |
HSN code |
GST rate |
|
Silver powder |
7106 10 00 |
3% |
|
Unwrought silver |
7106 91 00 |
3% |
|
Semi-manufactured silver |
7106 92 |
3% |
|
Silver plated with gold or platinum |
7106 |
3% |
|
Silver coins |
7118 |
3% |
|
Silver jewellery and articles |
7113 11 00 |
3% metal + 5% making charges |
Note: Classifications are indicative of standard usage under Chapter 71 and are subject to change through official notifications; the code applicable to a specific product is stated on the seller's invoice.
HSN 7106 is the base classification for the metal itself, with the sub-codes distinguishing form: powder, unwrought, semi-manufactured. Coins move to 7118 and finished jewellery to 7113, yet the gst rates on silver stay at 3% throughout the table. The coding system comes from the World Customs Organisation and runs uniformly across India, so the hsn code silver products carry reads the same on every invoice in the country.
How to Calculate GST on a Silver Purchase: Step-by-Step Examples
The formula: Total GST = (Metal value × 3%) + (Making charges × 5%). Both examples use assumed figures, with the day's market rate governing any real purchase.
Example 1, a silver bar. Take 100 grams priced at ₹23,500 as a working number. GST at 3% adds ₹705, and the buyer pays ₹24,205. One line, done, since bars carry no making charges.
Example 2, silver jewellery with itemised charges. Metal value ₹23,500 plus making charges of ₹2,000 on the same invoice. The metal's tax is ₹705, the making component adds 5% of ₹2,000 which is ₹100, total GST ₹805, and the bill closes at ₹26,305.
The invoice style changes the sum. Where making charges never appear separately and one bundled price of ₹25,500 covers everything, the composite treatment taxes the entire amount at 3%, giving ₹765 instead of ₹805. A small difference at this size, a larger one on heavy pieces, and reason enough to calculate gst on silver both ways before agreeing a quote.
Input Tax Credit (ITC) on Silver: Who Can Claim It?
Trade buyers first. A GST-registered jeweller or bullion dealer purchasing silver for business use may claim credit on the 3% paid, under the standard ITC conditions and subject to return-matching, which keeps the tax from cascading through the trade.
Households stand outside that system entirely. An individual buying silver for personal use, gifting, or investment has no itc on silver route; the 3% is a one-time, final cost, and silver put to personal consumption never qualifies for credit even in a registered person's hands. The input tax credit silver rules, in short, follow the buyer's registration and purpose, never the metal.
GST on Silver as an Investment: Key Points for Buyers
Three things an investor can hold onto. First, the tax is a single entry cost; it never recurs annually and nothing about holding silver attracts GST year to year. Second, selling is tax-free on the GST side, since the levy is purchase-side only, and an individual selling silver faces capital gains rules instead, a separate calculation altogether. The common belief that a sale triggers fresh GST is simply wrong.
Third, silver can work as collateral. Under RBI's 2026 lending framework, silver ornaments are eligible security within prescribed limits, valued against the 999 fine benchmark on the day rather than the tax-inclusive purchase price, so the GST once paid adds nothing to the pledgeable value. Households holding precious metals may consider an IIFL Finance gold loan for the gold side of the locker, with eligibility resting on assessment and prevailing guidelines, and the same market-value logic runs through both metals.
Conclusion
Silver's tax story is one number wide: 3% on the metal in every form under HSN 7106 and its cousins, 5% reserved for itemised making charges on jewellery, no cess, and one composite exception when bills are bundled. The two worked purchases cover a bar and an ornament, which between them describe nearly every retail silver transaction in India. For the investor, the tax is a known, one-time entry cost, with sales GST-free and pledges valued on the market rather than the bill. When precious metal at home needs to become working money, a gold loan may offer that route without a sale, subject to eligibility and applicable guidelines. All figures here are illustrative, and actual prices, taxes, and collateral values depend on the day's rates, the purchase in question, and the rules current at that point.
Frequently Asked Questions
What is the GST rate on silver in India in 2026?
3% on the metal value, across every product type: bars, coins, bullion, and jewellery alike, with making charges on jewellery carrying a separate 5% where itemised. No compensation cess applies to silver in any form. The figure sailed through the September 2025 restructuring untouched, since the Council kept precious metals on their special slab, and it applies identically in every state. For a quick check on any bill, the metal line times 0.03 gives the expected tax to the rupee.
Is the GST rate the same for silver jewellery and silver bars?
On the metal, yes: both carry 3% of the silver's value. The difference sits entirely in the second line, since jewellery attracts 5% on its making charges when the invoice itemises them, while a bar or coin involves no crafting and never sees that line at all. A bundled jewellery quote without itemised making charges takes 3% on the whole amount under the composite treatment. Comparing a bar and an ornament of equal metal weight, the jewellery bill runs higher on labour and its tax, never on the metal's rate.
Do silver coins attract GST in India?
Yes, at 3% of the sale value, classified under HSN 7118. Standard coins sold by dealers and jewellers all carry that rate, with any minting premium inside the price taxed within the same 3%, and no making-charge line arises since coins are not crafted jewellery. Commemorative issues from official mints follow their own pricing but the same tax logic in general. Keeping the coin's invoice matters, since documented weight and fineness speed up any later sale or valuation considerably.
Can an individual buyer claim Input Tax Credit on silver purchased for personal use?
No. ITC belongs exclusively to GST-registered businesses buying silver for commercial purposes, jewellers and bullion traders among them, and even they cannot claim it where the metal goes to personal consumption or gifting. A household buying silver for the almirah or as an investment absorbs the 3% permanently, with no credit, refund, or later adjustment available. The practical budgeting rule for individuals is to price silver at its tax-inclusive cost from the start, because that is the true amount invested.
How is GST calculated when making charges appear on a separate invoice?
Separately itemised making charges take 5%, with the metal value taxed at 3%, and the two amounts add up to the bill's total tax; the worked jewellery example on this page runs exactly that split. Where the seller issues one combined figure with no separation, the entire amount is taxed at 3% under the composite supply treatment, which can produce a slightly lower total tax than the split method. Since the invoice structure decides the arithmetic, confirming the billing style before purchase removes any surprise at the counter.
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
