Introduction: Gold has always been an integral part of Indian culture, serving as an investment and a symbol of wealth. When purchasing 24-carat gold in India, it is essential to consider the Goods and Services Tax (GST) applied to it. This article explains the GST rate applicable to 24-carat gold, its impact on buyers, and other key details.
GST Rate on 24 Carat Gold in India
As per the latest taxation structure, the GST rate on gold, including 24-carat gold, is 3%. This tax is levied on the actual gold value. Additionally, if you opt for making charges on gold jewelry, a 5% GST is applied to the making charges.
Breakdown of Gold GST Charges:
- GST on Gold (24 Carat & Other Purity): 3%
- GST on Making Charges: 5%
The total cost of gold increases due to these taxes, which must be considered before making a purchase.
Impact of GST on Gold Buyers
- Increased Price: The inclusion of GST has slightly raised the overall price of gold compared to the pre-GST era.
- Transparency in Pricing: GST has helped create uniform gold pricing across states, preventing price manipulation.
- Investment Consideration: Investors must factor in GST when purchasing gold as an asset to ensure better returns.
GST Calculation on 24 Carat Gold
Let’s consider an example:
- Price of 24-carat gold per gram = ₹6,000
- GST on gold (3%) = ₹180 per gram
- Making charges (₹500 per gram) + GST on making charges (5%) = ₹25
- Total Price per gram = ₹6,205
This calculation helps buyers understand the effective price of gold after taxes.
How to Save GST on Gold Purchases?
Although GST is mandatory, some strategies can help minimize its impact:
- Buy Digital Gold or Sovereign Gold Bonds (SGBs) – These investment options do not attract GST.
- Purchase Gold from GST-Registered Dealers – Ensures proper invoicing and avoids additional hidden charges.
- Invest in Gold ETFs – These financial instruments eliminate physical gold-related GST.
Frequently Asked Questions (FAQs)
The GST rate on 24-carat gold in India is 3%.
Yes, a 5% GST is applicable on the making charges of gold jewelry.
No, GST is mandatory on gold purchases, but investing in gold ETFs or SGBs can help avoid GST.
Yes, apart from the 3% GST, imported gold also attracts customs duty.
No, the GST rate on gold has remained at 3% since its introduction in 2017.
Conclusion
The GST on 24-carat gold is an essential factor to consider while buying gold in India. Whether purchasing for investment or jewelry, understanding the tax implications can help you make an informed decision. If you are interested in knowing the GST rates for 22-carat gold, check out our detailed guide here.
