By Rajesh Londe, 3rd generation Nagpur jeweller and BIS certified valuer | Published 4 August 2026
Reading time 8 minutes. General information for gold buyers, not tax advice.
Most of the confusion around gold GST disappears once you separate the transactions rather than the components. Here is every common case in one place.
| Transaction | GST rate | What the rate is applied to |
|---|---|---|
| You buy finished gold jewellery from a jeweller | 3 percent | The total transaction value, making charge included, shown separately or not |
| You buy a gold coin or a gold bar | 3 percent | The total invoice value of the coin or bar |
| You buy silver jewellery or silver coins | 3 percent | The total transaction value, same treatment as gold |
| You buy a diamond ornament set in gold | 3 percent | The total transaction value of the finished ornament |
| You sell or exchange your old gold as a private individual | Nil | Nothing. You are not in business, so it is not a taxable supply |
| A jeweller sends gold to a karigar for making | 5 percent | The job charges only, on a business to business invoice you never see |
| A hallmarking centre tests and marks an article | 18 percent | The centre's service fee, billed to the jeweller, not to you |
Only the first four rows describe something a retail buyer actually pays, and every one of them is 3 percent. The rows carrying a different number are transactions between businesses, upstream of the counter you are standing at.
The clearest source on gold GST is not a news article, it is the official FAQ on Gems and Jewellery under GST, published by the Directorate of Commercial Taxes and framed against the CGST Act, 2017. Question 7 asks a jeweller's version of exactly the question buyers ask: selling a 10 gram gold chain at a total value of Rs 30,000, of which the gold is Rs 28,000 and the making charge is Rs 2,000, should the jeweller charge one rate on the whole value or two rates on the two components?
The answer is one sentence long, and it is worth reading in full:
"GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not."
That is the whole rule. On the worked example in the question, the tax is 3 percent of Rs 30,000, which is Rs 900. It is not 3 percent of Rs 28,000 with something else applied to the Rs 2,000. The legal machinery behind it is section 8 of the CGST Act, which deals with composite supply: where goods and services are naturally bundled and supplied together, the whole bundle takes the rate of the principal supply. In a gold ornament the principal supply is the gold, so the whole ornament is taxed at the gold rate.
The split rate story is not invented, it is misfiled. It comes from the very next question in the same official FAQ. Question 8 asks what happens when a jeweller issues gold as raw material to a job worker and the job worker returns it as finished goods. The answer: the job worker, if registered, pays GST at the rate of 5 percent on the job charges only, and the jewellery manufacturer takes input credit of that tax against the GST on its own outward supply.
So the 5 percent is real. It sits on an invoice raised by a karigar to a jeweller, for labour, in a chain where the tax is credited back and washes out. Somewhere between the FAQ and the wider internet, question 8 got stapled onto question 7, and the result is the confident and incorrect claim that a retail buyer pays one rate on gold and a second rate on making.
There is one genuine case where a customer touches the job work rate: if you take your own gold to a karigar and pay only for labour, no ornament is being sold to you, so there is no composite supply and the labour is taxed as a service. That is a different transaction from buying a finished piece off a showroom tray, and it is the only situation in which the number you keep reading about would apply to you.
Yes, and it applies at 3 percent as part of the same base. This is the point most buyers get backwards. Showing the making charge on its own line does not move it into a different tax bracket. The official answer above settles it in the phrase "whether the making charge is shown separately or not". A jeweller who itemises the making charge is being transparent about pricing, not restructuring your tax.
This matters commercially, because making charges are the part of a gold bill with the widest variation between shops. Two jewellers quoting the same gold rate can differ by thousands of rupees on the making, and the GST simply scales with whatever that number is. For what the bands actually look like locally, see our guide to gold making charges in Nagpur, and our comparison of wastage versus making charges, which is the other line where bills quietly diverge.
A correct gold invoice shows GST as its own line, calculated at 3 percent of the subtotal, and within Maharashtra it is split into two halves. Expect to see:
Two halves of 1.5 percent is not a second tax. It is one 3 percent levy divided between the centre and the state, and it appears that way on every intra state sale in India. If you are buying from a jeweller in another state and having the piece shipped, you will see a single IGST line of 3 percent instead. The total is identical.
If a shop hands you one figure with no GST line, no weight and no HUID, the tax is the smallest of your problems. You are also being left without the document that proves your cost of acquisition years later, when you sell or exchange. For a line by line audit of a gold bill, work through our gold bill verification checklist before you pay.
You pay no GST on the old gold you hand over, but GST is charged on the full value of the new piece, not on the balance after the exchange is deducted. Both halves of that sentence surprise people, so take them one at a time.
On the old gold: a CBIC press release dated 13 July 2017 corrected an earlier statement made in a GST master class and clarified the position. Its reasoning is that although selling old gold is a transaction for consideration, it is not made in the course or furtherance of business, because selling old jewellery is not an individual's business. It therefore does not qualify as a supply at all, and the jeweller is not liable to pay tax under reverse charge on such purchases. Your old bangles are not a taxable event.
On the new piece: the two legs stay separate in GST law even when a single invoice nets them off visually. The tax is computed on the transaction value of what is being supplied to you, which is the whole new ornament. If you buy a piece worth Rs 2,00,000 and surrender old gold valued at Rs 80,000, the GST is 3 percent of Rs 2,00,000, not 3 percent of the Rs 1,20,000 you actually hand over. Any shop offering to charge you tax on the net figure is doing something it cannot support if the invoice is examined, and the person left holding a defective bill is you.
The compensating advantage of exchanging rather than selling for cash is documentation. A properly written exchange invoice records the weight and valuation of the old gold surrendered against the new piece, which is a far better record than a cash sale with no paper behind it. At Londe Jewellers Gold & Diamonds we accept 22K and 24K gold for exchange at the prevailing IBJA rate with zero deduction, including pieces originally bought from any other jeweller in India, and the old gold weight and valuation are printed on the new invoice. The policy is set out on our gold exchange in Nagpur page. We settle old gold, refunds and returns by bank transfer or UPI, never in cash, so both sides keep a traceable record.
Gold coins and gold bars attract the same 3 percent as gold jewellery, and so does silver in every form we sell. The rate does not vary with purity, weight or format. What varies is what the 3 percent is sitting on.
On a coin there is little or no making charge, so 3 percent of the invoice is very close to 3 percent of the metal value. On an ornament the same 3 percent also sits on the making charge folded into the transaction value, which is why the tax on a heavily worked bridal piece looks larger than the tax on a coin of similar gold weight. Nothing different is being charged, the base is simply bigger. Buyers comparing the two should read our gold coin price and buying guide alongside this page.
Nothing changed for gold. The GST Council at its 56th meeting on 3 September 2025 collapsed the old four slab structure into 5 percent and 18 percent, added a 40 percent rate for luxury and sin goods, and brought the new structure into effect from 22 September 2025. Gold and silver were deliberately left out of the restructuring and stayed at 3 percent.
That means the rate on gold jewellery has been unchanged since GST began on 1 July 2017. If you are reading an article that presents a new gold GST rate for 2026, check what it is actually describing. In our experience it is either the job work rate again, or the new general slabs applied to a category gold was never in.
This page is general information, not tax advice. GST rates and rules change through Council decisions and notifications, and individual circumstances vary. Confirm your own position with a chartered accountant or a GST practitioner before acting on any figure here.
The BIS hallmarking charge is a service fee the jeweller pays to a BIS recognised Assaying and Hallmarking Centre, not a government levy on the buyer. BIS prescribes a maximum of Rs 45 per article, with a minimum of Rs 200 for a consignment, exclusive of GST. It is charged per article regardless of how heavy that article is, which is why it is a meaningful cost on a light chain and a rounding error on a bridal set.
Because it is a cost input for the jeweller, it should not turn up on your bill as a separate tax line sitting beside GST. If it does, ask what it is. Verifying the hallmark itself takes about a minute using the HUID on the piece, and our guide on how to check a BIS hallmark walks through it.
If you are holding an invoice you cannot follow, the fastest way to settle it is to put it on a counter next to someone who writes them. Bring any gold bill, ours or any other jeweller's, to our Sitabuldi store and we will read it with you line by line: the gram weight against the karat meter, the per gram rate against the day's IBJA benchmark, the making charge against the local band, and the GST line against the 3 percent it should be. There is no charge and no purchase required.
The same bill reading is available at our Gokulpeth, Manish Nagar and Nandanvan stores, all open 11 AM to 8:30 PM. Londe Jewellers Gold & Diamonds has been selling BIS hallmarked gold and natural certified diamonds in Nagpur since 1989, across 37 years and more than 5 lakh families.
