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How to calculate GST on Gold and Gold jewellery?

If you have decided to invest in Gold or buy Gold jewellery, here are a few things you need to keep in mind.

The new taxation regime impacted gold at different levels affecting its value, making, and even import.

When you buy gold jewellery, you have to pay GST on the gold as well its making charges. Additionally, being an imported item, gold attracts Customs Duty as well.You can take the help of a GST calculator to figure out the exact payment to be made. 

What are the applicable rates on purchasing new gold jewellery?

Since Gold is imported, 10 per cent Customs Duty is applicable.

Additionally, there is a 3 per cent GST on the market price of Gold. Plus there is a 5 per cent GST applicable on making charges.

How to calculate GST on Gold?

Let us take an example.

Tax Price after GST (in Rs)
Gold price for 10 Gram 45,000
Customs Duty 10 per cent 4,500
GST 3 per cent 1,350
Total 50,850
Making charges 5 per cent 2,542
Total Price 53,392

What is GST on Gold Ornaments?

India has a huge consumption when it comes to the gold market, especially gold jewellery. Most of the raw gold used in making the gold ornaments is imported from other countries. Post the new taxation regime, 5 per cent GST is applicable. Today, the consumer bears 3 per cent GST on gold value and 5 per cent on making charges (refer table above).

Before the GST was implemented, gold was sold with an extra 2 per cent rate to the consumer, out of which 1 per cent went to service tax and 1 per cent to VAT (Value Added Tax).

Can GST on gold be claimed?

A total of 5 per cent of the GST is levied on the making charges of the jewellery, and the registered jewellers can claim an input tax credit.

What is the Exemption of GST on gold?

The government of India has issued a list of public and private sector banks that are exempted under the scheme for ‘export against supply by the nominated agency’ from paying GST on imported gold. This is applicable to many notified agencies.

What about the quality of Gold?

Gold price that jewellers usually quote depends on its quality and location from where you are buying gold ornaments. Gold is available in different quality grades starting from 9K to 24K. Higher the karats, better will be the quality of jewellery and costlier will be its price. For instance, if the price of a 24K gold is Rs 45,000/10g, then 22K gold will be priced lower, which can be somewhere around Rs 42,700 to Rs 43,500/10g.

The rate of Gold also depends on the location, i.e., the city from where you’re buying gold jewellery. For instance, if the gold rate of 24K gold in Kolkata is Rs 32,345, then the gold rate of 24K gold in Kerala might be Rs 30,525. Hence, before going to shop for gold jewellery check the price of gold according to the location and quality.

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