How Much GST is Applied to 24 Carat Gold Rate in India

Learn about the impact of GST on 24 carat gold in India.
APPLY
Gold loan
APPLY
2 mins
28 May 2024

A significant portion of gold in India is imported from other countries. This imported gold attracts a customs duty of 12.5%, which is comprised of a basic customs duty of 10.5% and a 2.5% Agriculture Infrastructure and Development Cess (AIDC). Additionally, Social Welfare Cess and GST are also applicable at the time of import. These taxes and duties are subject to periodic updates by the government.

Before the implementation of GST, the customs duty on gold was around 10%. Currently, for example, if gold is worth Rs. 50,000 is imported into India, a customs duty of Rs. 6,250 is payable on the transaction. This higher duty impacts the overall cost of gold in the market, contributing to its price.

How to calculate GST on gold jewellery?

Calculating GST on gold jewellery involves understanding the applicable GST rate and the value of the jewellery. As of now, the GST rate on gold jewellery is 3%. Here's how you can calculate it:

  1. Determine the value: Calculate the total value of the gold jewellery, which includes the cost of gold, making charges, and any other costs.
  2. Apply GST rate: Multiply the total value by the GST rate (3%). For example, if the total value of the jewellery is Rs. 50,000, the GST would be calculated as follows:
    GST=Total Value×GST Rate
    GST=50,000×0.03=1,500GST=50,000×0.03=1,500
  3. Add GST to the value: Add the calculated GST to the total value of the jewellery to get the final price.

Therefore, if you are buying gold jewellery worth Rs. 50,000, the GST amount would be Rs. 1,500, making the final price Rs. 51,500. Always ensure to check the latest GST rates and any additional charges applicable.

Example of GST on gold calculation

Here is a summary of the current GST rates and other taxes on gold in India:

Type of Transaction Tax Rate
Import of gold 12.5% customs duty on the value of gold imported
Gold jewellery making charges 5% GST on making charges
GST on gold 3% on the value of gold purchased


Sample Calculation for Gold Jewellery Purchase

  1. Base price of gold imported: Rs. 50,000
  2. Customs Duty (12.5% of Base Price): Rs. 6,250
  3. GST on gold (3% of Base Price + Customs Duty): Rs. 1,688
  4. Making charges (10% of Total so far): Rs. 5,794
  5. GST on making charges (5% of Making Charges): Rs. 290
  6. Total price of gold jewellery purchase: Rs. 64,024

So, for gold jewellery with a base price of Rs. 50,000, the total cost, including all taxes and GST, would be Rs. 64,024.

For accurate calculation, it is advisable to visit a reputed jewelry store.

GST on gold exemptions

In India, certain exemptions and reductions in GST apply to gold under specific circumstances to provide relief and support for particular sectors:

  1. Supply to RBI and Refining Gold Doré Bars: Lower customs duty and reduced GST burden.
  2. Small-Scale Artisans and Jewellers: GST exemption for those with an annual turnover below a certain threshold.
  3. Charitable Trusts and Religious Institutions: GST exemption on gold donations to promote cultural practices.

Things to consider before buying 24 carat gold ornaments

  1. Purity: Verify 24 carat gold (91.6% pure) through hallmark certification.
  2. Price: Check current market rates and compare prices across jewellers.
  3. Making charges: Negotiate or find fixed-rate making charges to save money.
  4. Design and weight: Heavier pieces cost more; choose designs wisely.
  5. Buyback policy: Ensure a good buyback or exchange policy.
  6. Reputation of the seller: Purchase from reputable jewellers to avoid counterfeit products.

Impact of GST on 24 Carat Gold Rates

The implementation of GST has increased the overall cost of 24-carat gold due to a 3% tax on its value and an additional 5% GST on making charges. Before GST, various state taxes and excise duties made the tax structure complex and inconsistent. GST has streamlined this, creating a uniform tax rate, simplifying the buying process, and reducing tax evasion.

While GST led to a marginal increase in gold prices, it brought transparency and consistency, benefiting the market. Consumers now experience clearer pricing, and the organised sector has gained more trust. For those needing quick funds, gold loans have become attractive in the GST-regulated environment, allowing individuals to secure loans without selling their jewellery, adding flexibility and financial security in the post-GST landscape.

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Frequently asked questions

How much GST is levied 24 carat gold?
The GST rate on 24-carat gold in India is 3% of its value. Additionally, if you are purchasing gold jewellery, a 5% GST is applied to the making charges. This uniform tax rate under GST simplifies the buying process, ensuring transparency and consistency in gold pricing across the country.
How to calculate GST?
To calculate GST, first determine the taxable value of the item or service. Multiply this value by the applicable GST rate (e.g., 18%). For example, if the taxable value is Rs. 1,000 and the GST rate is 18%, the GST amount is Rs. 180. Add this GST amount to the taxable value to get the total price.
Does gold have 12% GST?
No, gold does not have a 12% GST. The GST rate on gold in India is 3% on its value. Additionally, there is a 5% GST on the making charges of gold jewellery. However, imported gold also attracts a 12.5% customs duty, which is separate from the GST.
How much GST is 24 carat gold?

The GST rate on 24-carat gold in India is 3% on the value of the gold purchased. Additionally, if there are any making charges involved, they attract a 5% GST. This uniform tax rate ensures transparency and consistency in the gold market, simplifying the buying process for consumers.

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