Gold continues to play a central role in Indian household finances, serving both emotional and financial purposes. Whether purchased as jewellery for personal use or held as an investment asset, gold remains closely linked to savings and wealth-planning decisions. In this context, understanding GST on gold in India in 2026 is essential, as even a small tax component can materially affect the final purchase cost.
The GST rate on gold differs from that of many everyday goods. It applies not only to the base value of gold but also to related components, such as making charges for jewellery. This often leads to confusion for buyers, especially when the GST impact on gold rates is not clearly explained at the billing stage. Many consumers track the market price of gold but overlook how the gold tax in India increases the amount payable.
With 2026 in view, this blog outlines the tax rate on gold in India and explains how it applies across common gold purchases. It covers how the GST on gold applies to jewellery, ornaments, coins, and investment-linked gold products, along with calculation examples and exemptions. The aim is to help buyers and investors understand the full cost structure of gold purchases and make informed financial decisions with clarity and confidence.
What Is the GST Rate on Gold in India?
The GST on gold in India is applied as a fixed percentage of the gold’s value at the time of purchase. This rate is uniform across the country and does not vary by state, city, or seller. Whether gold is purchased as jewellery, coins, bars, or bullion, the base GST rate on gold remains the same. Currently, the GST rate on gold is 3%.
From a taxation standpoint, gold is treated as a taxable supply under the Goods and Services Tax framework. The gold GST percentage is applied to the transaction value, which is typically calculated using the prevailing market rate on the day of purchase. This ensures consistency in how gold transactions are taxed across organized and unorganized sellers.
It is important to note that the tax rate on gold in India applies only to the value of gold itself. Additional charges, such as those for jewellery, are taxed separately and follow a different GST treatment. This distinction becomes important when reviewing invoices and understanding why the final payable amount exceeds the quoted gold price.
For buyers, the key takeaway is that GST on gold purchases is predictable and standardized. While the market price of gold fluctuates daily, the applicable GST rate remains constant, allowing consumers to estimate the tax component in advance and plan purchases with better cost visibility.
Gold Tax in India: How GST Fits into the Overall Tax Framework
GST as a Transaction-Level Tax on Gold Purchases
GST on gold is applied only when a purchase takes place. The tax is triggered at the point of sale and is calculated on the transaction value of gold for that specific invoice. It does not apply to holding gold, gifting gold, or inheriting gold, as long as no sale occurs.
How GST Replaced Multiple Indirect Taxes on Gold
Prior to GST, gold purchases were taxed through a combination of state and central levies. These included VAT, excise duty, and local entry taxes, which varied across states, making price comparisons difficult. GST replaced these fragmented charges with a single tax structure, allowing gold prices to remain consistent nationwide.
Difference Between GST and Income Tax on Gold
GST and income tax operate at different stages of a gold transaction. GST applies upfront during purchase, while income tax becomes relevant only when gold is sold and a gain is realised. Holding period, sale price, and profit determine income tax liability, not the purchase GST already paid.
Why GST Is Treated as a Fixed Cost in Gold Buying
From a financial planning perspective, GST on gold functions as a non-recoverable acquisition cost for most buyers. Since consumers cannot claim input tax credit on personal gold purchases, GST is absorbed into the purchase price and should be considered part of the total cost of ownership.
22 Carat Gold GST Rate in India
22-carat gold is the most commonly purchased form of gold in India, especially for jewellery. It offers high gold purity while being durable enough for everyday wear, which is why most retail jewellery transactions involve 22-carat gold. From a GST perspective, its usage does not change how the tax is applied.
The 22-carat gold GST rate is applied directly to the value of gold at the time of purchase, based on the prevailing market price. The GST rate remains the same regardless of design complexity, brand, or city of purchase. What varies is the base value of gold, which is updated daily based on market rates.
It is important for buyers to understand that GST on 22-carat gold applies only to the gold’s value. Any additional charges, such as jewellery charges, are taxed separately and reflected as a separate line item on the invoice. Reviewing this breakup helps buyers clearly see how much tax is being paid on gold versus workmanship.
24 Carat Gold GST Rate in India
24 carat gold represents the highest level of gold purity and is primarily purchased in the form of coins, bars, and bullion. In India, it is commonly used for investment and wealth preservation rather than everyday jewellery, due to its soft nature. This difference in usage affects how buyers evaluate cost, but it does not alter the way GST is applied.
The 24-carat gold GST rate is charged on the transaction value at the time of purchase. The applicable GST remains consistent across all sellers and locations in India. Whether the gold is purchased from a bank, jeweller, or authorised dealer, the GST treatment does not change.
For investment-focused buyers, the key factor is understanding that GST forms part of the acquisition cost. While the purity of 24-carat gold may influence resale value, GST paid at the time of purchase is not recoverable for individual investors. This makes it important to factor the tax component into long-term return calculations when buying high-purity gold.
GST Rate on Gold Jewellery and Making Charges
When gold is purchased as jewellery, GST on gold jewellery is applied to more than just the value of the metal. Jewellery is treated as a finished product, which means taxation is calculated on multiple components that together form the final invoice value. This structure is important for buyers who want clarity on how the total cost is built.
GST is first applied to the value of gold used in the jewellery, based on the prevailing gold rate, and GST calculation on the day of purchase. In addition to this, making charges are taxed separately. Making charges represent the cost of labour, design, and craftsmanship involved in converting raw gold into wearable jewellery, and they are subject to GST as a service component.
This is why GST on gold ornaments and jewellery often appears higher than expected on invoices. Even when the base GST on gold purchase remains constant, higher making charges increase the overall tax payable. Checking the invoice breakup allows buyers to clearly see how much GST is applied to the gold value and how much is applied to workmanship, improving cost transparency and billing confidence.
GST on Custom-Made Jewellery
Custom-made jewellery is priced differently from ready-made pieces, and the tax treatment reflects that difference. When a buyer places a custom order, the final price usually includes gold value, specialised workmanship, and design effort, all of which are captured in the final invoice.
In such cases, GST on gold purchase is applied at the time of final billing, not when the order is placed. The gold component is calculated using the prevailing gold rate GST on the invoice date. Separately, the making and design charges are treated as a service and attract GST on their billed value.
Because pricing is not standardised, buyers should pay close attention to invoice structure. The bill should clearly show the gold value, the charges, and the applicable GST on gold jewellery for each component. This clarity helps confirm that the correct tax rate on gold in India has been applied, especially in high-value, customised purchases.
Also read: Types of GST Returns: and Filing with Due Dates of Returns
GST Calculation on Gold Purchase
Step 1: Determining the Gold Value for Tax Calculation
The GST calculation starts with the value of gold mentioned on the invoice. This value is based on the weight purchased and the per-gram price applicable on the transaction date. Since gold prices fluctuate daily, the taxable value changes with each purchase.
Step 2: Applying GST on the Gold Component
Once the gold value is fixed, GST on gold is applied as a percentage of this amount. This tax is calculated only on the gold value and not on any additional charges. The resulting figure represents the GST payable on the gold portion of the transaction.
Step 3: Calculating GST on Additional Charges
If the purchase includes making charges or service-related costs, these are taxed separately. GST is calculated on these amounts as services and added to the overall tax payable. This separation explains why jewellery invoices show multiple GST line items.
Step 4: Arriving at the Total Payable Amount
The final amount payable includes the gold value, additional charges, and the combined GST applied to each component. Reviewing this breakdown helps buyers confirm that the GST rate on gold has been applied correctly and that the invoice reflects accurate taxation.
Example Calculation of GST on Gold in 2026
Scenario Setup: 10 Gram Gold Purchase
Assume a buyer purchases 10 grams of gold in 2026 at the prevailing market rate quoted by the seller. The price used for calculation is the rate applicable on the invoice date, not the booking or advance payment date.
Calculating GST on the Gold Value
First, the total value of 10 grams of gold is calculated by multiplying the per-gram rate by the quantity purchased. Once this base value is established, GST is applied to arrive at the tax payable on the gold component.
Including GST on Making Charges
If the purchase involves jewellery, making charges are added separately. GST is calculated on these charges as a service component and added to the tax on gold. This increases the overall GST payable, even when the gold price remains unchanged.
Final Invoice Amount and Buyer Checkpoints
The final payable amount includes the gold value, making charges, and the combined GST from both components. Buyers should verify that the invoice clearly shows each element, ensuring transparency and accurate application of GST before completing payment.
Read more: Types of GST Returns and Their Filing Due Dates
GST on Gold in Investment Schemes
GST on Gold ETFs (Exchange-Traded Funds)
Gold ETFs represent paper-based exposure to gold prices and do not involve physical delivery at the time of investment. Since no physical gold is transferred to the investor, GST is not charged on the purchase of ETF units. Investors pay other charges such as brokerage and fund expenses, but GST on gold itself does not apply at this stage.
GST on Gold Mutual Funds
Gold mutual funds invest in gold-backed instruments such as ETFs rather than holding physical gold directly. Similar to ETFs, GST is not levied on the value of gold when investors buy mutual fund units. However, GST may apply to fund management and operational fees charged by the asset management company.
GST on Digital Gold Purchase
Digital gold involves a service provider purchasing physical gold on behalf of the buyer. In this case, GST is applied at the time of purchase because the transaction represents ownership of physical gold, even though delivery is deferred. When digital gold is later converted into jewellery or coins, additional charges may apply, depending on the form chosen.
GST on Sovereign Gold Bonds (SGBs)
Sovereign Gold Bonds are government-issued securities linked to the price of gold. Since these bonds do not involve the purchase of physical gold, GST is not applicable at the time of investment. Investors earn returns through price appreciation and interest, making SGBs a GST-free entry point for gold-linked exposure.
Read more: What are GST Registration Requirements?
GST Exemptions on Gold in India
Gold Transactions Where GST Is Not Applicable
GST is charged only when gold is purchased through a taxable supply. Transactions such as gifting gold to family members or inheriting gold through succession do not attract GST, as there is no sale involved. The absence of a commercial transaction means GST is not triggered.
Government-Issued Gold Instruments and GST
Certain gold-linked instruments issued by the government do not attract GST. These instruments provide price-linked exposure without involving the purchase of physical gold, which is why GST does not apply at the entry stage.
Clarifying Common Misconceptions Around GST Exemptions
- GST exemption on gold does not apply to all types of gold transactions. Only specific scenarios qualify, and these are defined by how the transaction is structured rather than by the form of gold alone.
- Purchasing physical gold from a jeweller, whether as jewellery, coins, or bars, always attracts GST because it involves a taxable sale of goods.
- Buying digital gold through online platforms is also subject to GST, as the transaction represents ownership of physical gold held on the buyer’s behalf, even if delivery is deferred.
- Gold-linked instruments, such as certain government-issued securities, are not subject to GST because no physical gold is transferred at the time of investment.
- GST is considered “not applicable” in some cases, such as inheritance or gifting, because there is no sale involved. This is different from an exemption and should not be confused with tax relief.
- Buyers should always review the nature of the transaction rather than relying on product labels when assessing GST applicability, as incorrect assumptions often lead to billing misunderstandings.
Conclusion: Making Informed Gold Purchases Under GST
GST continues to be a fixed cost in gold transactions across India, and in 2026, it remains a key factor in determining the final purchase price. Whether buying jewellery or opting for investment-linked products, understanding how GST on gold is applied helps buyers avoid unexpected costs at the billing stage.
For retail buyers, the most important step is to review the invoice carefully. Check the gold value, making charges, and the GST rate on gold applied to each component. This allows for accurate price comparison across sellers and ensures that the tax has been calculated correctly. For investors, selecting the right gold instrument is equally important, as GST treatment differs between physical and non-physical formats.
Before completing any transaction, confirm the applicable tax rate on gold in India, understand when GST is charged, and recognise cases where it may not apply. Treat GST as part of the acquisition cost and factor it into your purchase or investment planning. Clear awareness of GST rules leads to informed decisions, cleaner documentation, and greater confidence when buying gold.
FAQs
1. Does GST apply when gold prices fall or rise during the day?
GST is calculated on the gold price mentioned on the invoice, not on intraday price movements. Even if gold prices fluctuate after the purchase, GST is locked to the transaction value at the time of billing. This means buyers are taxed based on the final invoice price, regardless of market changes before or after the purchase.
2. Is GST charged again when old gold jewellery is melted and remade?
GST is not charged on the value of old gold that is exchanged. However, GST applies to the value added, which usually includes making charges and any additional gold used. Buyers should ensure the invoice clearly reflects the net gold value adjustment to avoid GST being charged incorrectly on the full amount.
3. Can GST paid on gold ever be claimed back by individuals?
For individual buyers purchasing gold for personal use, GST cannot be claimed back. Input tax credit is not available to consumers. Only registered businesses involved in taxable supplies of gold may claim GST credits, subject to compliance rules. For retail buyers, GST remains a non-recoverable part of the purchase cost.
4. Is GST applicable when buying gold from banks or government outlets?
Yes, GST applies when physical gold is purchased from banks or authorised outlets. The seller does not change the GST treatment. If physical gold ownership is transferred through a sale, GST is charged on the transaction value. Only non-physical, government-issued instruments avoid GST at the purchase stage.
5. Does GST apply differently to hallmarked and non-hallmarked gold?
GST treatment does not change based on hallmarking. Whether gold is hallmarked or not, GST is calculated on the transaction value shown on the invoice. Hallmarking relates to purity assurance and consumer protection, not taxation. Buyers should still prefer hallmarked gold for quality and resale transparency.
6. Is GST charged when gold is gifted during weddings or festivals?
GST applies only if gold is purchased through a sale. If gold is gifted after being purchased, no additional GST applies at the time of gifting. However, the original purchase would have already attracted GST. Gifting itself does not trigger a separate GST event since no sale takes place.
7. Does GST apply when gold is purchased on EMI or installment plans?
GST is calculated on the full invoice value of gold at the time of purchase, even if payment is made through EMIs. The payment method does not affect GST applicability. Interest or financing charges linked to EMIs may attract separate taxes, depending on how the transaction is structured by the seller or financier.
8. Is GST applicable to the resale of gold by individuals?
When individuals sell gold to a jeweller or buyer, GST is generally not charged by the individual seller, as they are not registered suppliers. GST may apply at the buyer’s end if the transaction falls under specific business purchase rules. For individuals, resale proceeds are usually evaluated under income tax, not GST.
9. Does GST apply to gold stored in vaults or lockers?
GST is not charged merely for storing gold in a bank locker or private vault. However, locker rental or vault services attract GST as a service charge. The tax applies to the storage service, not to the gold itself. Ownership or holding of gold does not trigger GST.
10. How should buyers verify the correct GST application before paying?
Buyers should check that the invoice clearly separates the gold value, making charges, and GST applied to each component. The GST rate should be consistent with current regulations and calculated on the correct base values. Reviewing this breakup before payment helps avoid overcharging and ensures billing transparency.
