GST on gold in India is 3% on the gold value and 5% on making charges — but when you buy ready-made jewellery off the shelf, the whole bill (gold + making + stones) is taxed at just 3%. That single rule is why two jewellers can charge you different GST on what looks like the same ring. This guide breaks down exactly when 3% applies, when 5% kicks in, and how a jeweller must bill it in 2026 to stay compliant.
GST on gold: the rates at a glance
Three numbers cover almost every gold transaction in India:
| Component | GST rate | HSN |
|---|---|---|
| Gold value (jewellery, coins, bars) | 3% (1.5% CGST + 1.5% SGST) | 7108 / 7113 |
| Making / labour charges (billed separately as a service) | 5% | 9988 |
| Ready-made jewellery sold off the shelf | 3% on the whole bill | 7113 |
| Digital gold, gold coins, gold bars | 3% | 7108 |
The 3% rate is uniform across every state and every purity — 18K, 22K and 24K are all taxed the same. Customs import duty on gold is separate from GST and does not appear on your retail bill.
The 3%-vs-5% trap: composite supply explained
Here is the part that confuses almost everyone. When you walk into a showroom and buy a finished, ready-made ornament, GST law treats it as a composite supply: the gold is the "principal supply" and the craftsmanship is bundled with it. Because the principal supply is gold, the entire invoice — net gold value, stones and making charges — is taxed at a single 3%. You do not pay 5% on the making portion of a ready-made piece.
The 5% rate applies in a different situation: when making is a standalone service. Classic example — you bring your own gold to a jeweller and pay only for turning it into a bangle. Now there is no sale of gold, only a job-work/making service, so that labour charge is taxed at 5%.
Same making charge, two different GST rates — the difference is whether gold is being sold to you (composite, 3% on everything) or whether you are only paying for labour on gold you already own (service, 5%).
Old gold exchange: who pays GST?
Exchanging old jewellery for new is routine, and the GST treatment is simpler than people fear. When you (an ordinary individual, not a registered dealer) hand over old gold, you do not charge GST — a sale by an unregistered person is not a taxable supply. The jeweller then bills 3% on the full value of the new piece, and adjusts your old-gold value against the amount payable. You effectively pay 3% GST only on the top-up value, not twice.
How a jeweller must bill it in 2026
Even when the rate is a uniform 3% on a composite sale, a lumped "all-in" invoice breaks GST invoicing rules. A compliant gold invoice must itemise:
- Net gold value (weight × rate of the day, less any old-gold adjustment)
- Making charges shown as a separate line
- Stone / diamond value if applicable
- CGST and SGST split out (or IGST for an inter-state sale)
- BIS hallmark HUID — the 6-digit Hallmark Unique ID is mandatory on hallmarked jewellery, so your billing has to capture it per piece
Doing this by hand invites errors on every sale. See our GST invoice format guide for the exact fields, and our billing software checklist for picking a system that handles gold-rate-of-the-day, HUID capture and old-gold adjustment automatically.
5 checks before you bill a gold sale
- Is it a sale or just making? Ready-made sale → 3% on the whole bill. Labour only on the customer's gold → 5% on making.
- Itemise the invoice — gold value, making, stones, CGST, SGST separately, never a single clubbed figure.
- Capture the HUID for every hallmarked piece on the bill.
- Adjust old gold against the new piece's value; charge 3% on the new piece, not on the exchanged metal.
- Check your e-invoicing duty — businesses above the ₹5 crore turnover threshold must generate e-invoices; gold retailers are not exempt. See the 2026 GST rates guide for current thresholds.
Frequently asked questions
Is GST on gold 3% or 5%?
Both, depending on what is being supplied. Gold value is 3% and making charges are 5%. But a ready-made ornament sold off the shelf is a composite supply taxed wholly at 3% — you only pay 5% when making is billed as a standalone service on gold you already own.
Do I pay GST when I sell my old gold to a jeweller?
No. If you are an ordinary individual and not a registered dealer, selling or exchanging your old gold is not a taxable supply, so you charge no GST. The jeweller bills 3% on the new piece and adjusts your old-gold value against it.
Does the 3% GST rate change with gold purity?
No. The 3% rate is the same for 18K, 22K and 24K, and the same in every state. Purity changes the gold's price, not the GST rate.
Is making charge always taxed at 5%?
No. Making charge is taxed at 5% only when it is a separate service — for example, labour on gold you supplied. When you buy a finished ornament, the making charge is part of a composite supply and is taxed at 3% along with the gold.
The bottom line
For nearly every showroom purchase in India, gold GST is simply 3% on the total bill. The 5% making-charge rate only bites when making is sold as a pure service. Jewellers stay clean by itemising every invoice, capturing the HUID, and adjusting old gold correctly — and a billing system built for gold does all three without a second thought. See how RichPOS bills gold sales with rate-of-the-day, HUID and GST split handled automatically.
Sources: CBIC GST rate schedule (HSN 7108 / 7113 gold, 9988 job work); ClearTax, Razorpay and PKC Management Consulting GST-on-gold guides, 2026. Verify current thresholds with your CA before filing.
