Precious MetalsHSN Chapter 71

GST on Gold & Jewellery — Rates, Making Charges & Old Gold Exchange

Complete guide to GST on gold, silver, platinum, diamonds, and jewellery. Covers 3% on precious metals, 5% on making charges, old gold RCM, job work, hallmarking, e-invoicing for jewellers, and composition scheme eligibility.

3%

Gold/Silver/Platinum

5%

Making Charges

3.25%

Gold Dore Bar

1.5%

Diamond (Cut & Polished)

18%

Imitation Jewellery

5%

Job Work (Jewellery)

₹5 Cr

E-Invoice Threshold

71

HSN Chapter

GST Provisions for Gold & Jewellery

Gold, Silver & Platinum — 3% GST

GST at 3% applies on gold (bars, coins, biscuits), silver, and platinum in all forms. This is one of the lowest GST rates. The 14th Council Meeting (May 2017) specifically fixed gold at 3% after extensive debate. Applies to both bullion and articles of precious metals.

Making Charges — 5% GST

Making charges (labour for converting gold into jewellery) attract 5% GST separately. If jeweller charges ₹50,000 for gold + ₹3,000 making charges, GST is: ₹1,500 (3% on gold) + ₹150 (5% on making). Total invoice shows both components clearly.

Old Gold Purchase & Exchange

When a customer sells old gold to a jeweller, the jeweller must pay 3% GST under Reverse Charge Mechanism (RCM) if purchasing from an unregistered person. For exchange (old gold against new jewellery), GST is charged on the net differential value after deducting old gold value.

Job Work for Jewellers — 5%

Job work on gold/silver jewellery (karigars, artisans) attracts 5% GST. The principal jeweller sends gold to job workers who return finished articles. No GST on gold sent for job work (it's not a supply). Only the service charge (making) is taxed at 5%.

E-Invoicing for Jewellers

From April 2023, jewellers with turnover exceeding ₹5 crore must generate e-invoices for B2B sales. Each invoice gets a unique IRN from the Invoice Registration Portal. B2C retail sales are exempt from e-invoicing. Hallmarking invoices must carry HUID (Hallmark Unique Identification).

ITC & Composition Scheme

Jewellers can claim ITC on making charges, rent, professional services, etc. However, ITC is NOT available on gold/silver purchased for personal use. Composition scheme (1% tax, no ITC) is available for jewellers with turnover ≤₹1.5 crore — but most avoid it due to lost ITC benefit.

GST Rate Matrix — Gems & Jewellery

ItemHSNRateNotes
Gold bars, coins, biscuits71083%All forms of gold
Silver bars, coins, articles71063%All forms of silver
Platinum bars, coins71103%Unwrought or semi-manufactured
Gold Dore bar (for refining)71083.25%Imported for refining
Diamond (cut & polished)71021.5%Reduced from 0.25% in 2022
Rough diamonds71020.25%Unworked/simply sawn
Making charges / job work99885%Labour component
Gold jewellery (composite)71133%Includes gold value + making
Imitation jewellery711718%Artificial/fashion jewellery
Hallmarking services998318%BIS hallmarking fee
Pearls (natural/cultured)71013%Unworked or processed
Precious/semi-precious stones71030.25%Unworked; 1.5% if cut

Frequently Asked Questions

What is the GST rate on gold jewellery purchase?
Gold jewellery attracts 3% GST on the gold value plus 5% GST on making charges. For example, if gold value is ₹1,00,000 and making charges are ₹5,000: GST = ₹3,000 (3% on gold) + ₹250 (5% on making) = ₹3,250 total GST. The invoice must show both components separately.
How is GST calculated when exchanging old gold for new jewellery?
When old gold is exchanged, GST is charged on the net value. Example: New jewellery = ₹2,00,000, Old gold value = ₹1,50,000, Difference = ₹50,000. GST is charged on ₹50,000 (3%) + making charges (5%). The jeweller pays 3% RCM on the old gold purchase value from the customer.
Do jewellers need to register under GST?
Yes, if annual turnover exceeds ₹20 lakh (₹10 lakh for special category states). Given gold prices, most jewellers cross this threshold easily. Registration is mandatory for inter-state sales regardless of turnover. Jewellers can opt for composition scheme (1% tax, no ITC) if turnover ≤₹1.5 crore.
Is GST applicable on gold held for investment (gold ETFs, sovereign gold bonds)?
Gold ETFs: GST is embedded in the NAV (investors don't pay separately). Sovereign Gold Bonds (SGB): Exempt from GST on purchase/redemption. Digital Gold: 3% GST on purchase value. Gold mutual funds: No separate GST. Physical delivery from digital gold/ETF attracts 3% GST on conversion.

Jewellery Business GST — Simplified

Laabam.One handles gold invoicing with split components (metal + making), old gold RCM, job work tracking, and e-invoicing for jewellers automatically.

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