GST On Gold Jewelry: Rate & Calculation Formula

image for gst on gold jewellery

The Goods and Service Tax came into existence on 01st July 2017. Since then the government fixed various GST rates for various items and services. Also, the GST rates on such items and services are revised at various times as per the suggestions from GST Council. The GST council is an appointed committee by the government of India. Thus, it suggests and revises the GST On Gold Jewellery, cars, restaurant, books, and rent. Also, it is applicable to other electronic items like mobile phones, air conditioners, laptops, etc. Let us see the various GST rates on these items and services.

Rate of GST On Gold Jewelry

Let us understand how GST is calculated on Gold in India. Thus, you can find out the final price of the jewelry with GST. The current Goods and Service tax rate on Gold is: 3% (CGST = 1.5%; SGST= 1.5%). The GST rate @3% is applicable on the final value of Gold jewelry including the making charges. However, the making charges can be shown separately on the invoice.

The formula to calculate the final price of Gold Jewelry is:

Final price of the jewellery = Price of (22 KT or 18 KT) gold x (Weight in grams) + Making charges + GST at 3% on (Price of jewellery + making charges).

Illustration: If you wish to buy 15 grams of 22 Karat Gold and the price of 22 Karat Gold listed at the jewelers’ shop is Rs. 45,000 per 10 grams. Similarly, the jeweler-making charges are 15% for your type of jewelry. Here is how the Jeweler will calculate the final jewelry price :

  1. Value of 10 grams of 22 Karat Gold = Rs. 45,000
  2. Value of 1 gram of 22 Karat Gold = Rs. 45,000/10 = Rs. 4,500
  3. Value of 15 grams of 22 Karat Gold you want to buy = Rs. 4,500 * 12 = Rs. 54,000
  4. Making charges on the jewellery item = 15% of Rs. 54,000 = Rs. 8,100
  5. The total value of jewelry excluding tax = is Rs. 54,000 + Rs. 8,100 = Rs. 62,100.
  6. GST @ 3% on the total value of jewelry = 3% on Rs. 62,100 = Rs. 1,863

Thus, the final value of jewellery = Rs. 62,100 + Rs. 1,863 = Rs. 63,963

What is Karat In Gold?

Gold jewelry is available in various Karats (KT) in India. Thus, Karat is the measure of the purity of gold. Hence, 24KT is the most purified form of gold. However, it is too soft to be used for creating jewellery items. Therefore, the most popular form of gold available in jewellery is 22KT which contains 91.6% gold.

Read: SAC codes under GST 2022

Frequently Asked Questions

How much percentage of GST is for gold?

It is 3% (CGST=1.5% + SGST=1.5%)

Will GST increase Gold Price?

It depends on how much the GST rate is charged on the basis value of Gold.

Is Gold GST Free?

No. Gold attracts import duty if imported into India. Thereafter, GST will be added while selling.

Is Gold GST Exempted?

No. GST is payable on Gold sales.