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
| Item | HSN | Rate | Notes |
|---|---|---|---|
| Gold bars, coins, biscuits | 7108 | 3% | All forms of gold |
| Silver bars, coins, articles | 7106 | 3% | All forms of silver |
| Platinum bars, coins | 7110 | 3% | Unwrought or semi-manufactured |
| Gold Dore bar (for refining) | 7108 | 3.25% | Imported for refining |
| Diamond (cut & polished) | 7102 | 1.5% | Reduced from 0.25% in 2022 |
| Rough diamonds | 7102 | 0.25% | Unworked/simply sawn |
| Making charges / job work | 9988 | 5% | Labour component |
| Gold jewellery (composite) | 7113 | 3% | Includes gold value + making |
| Imitation jewellery | 7117 | 18% | Artificial/fashion jewellery |
| Hallmarking services | 9983 | 18% | BIS hallmarking fee |
| Pearls (natural/cultured) | 7101 | 3% | Unworked or processed |
| Precious/semi-precious stones | 7103 | 0.25% | Unworked; 1.5% if cut |
Frequently Asked Questions
What is the GST rate on gold jewellery purchase?
How is GST calculated when exchanging old gold for new jewellery?
Do jewellers need to register under GST?
Is GST applicable on gold held for investment (gold ETFs, sovereign gold bonds)?
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.
Explore GST Law