GST on Gold in India: 3% on Gold, 5% on Making

GST on gold in India is 3% on the value of the gold and 5% on making charges when they are billed separately. So a jewellery bill carries two tax lines, not one, and the overall tax rate on your purchase sits somewhere between 3% and 5% depending on how heavy the making is.

Compare that with Dubai, where 5% UAE VAT is charged on the whole invoice. The tax line alone is rarely what makes one country cheaper than the other, but it's worth understanding before you sit down with any jeweller.

A real-looking bill, line by line

Here's how a typical Indian jeweller builds the price of a 22K necklace. The numbers are illustrative: say the 22K rate is ₹7,000 a gram, the piece weighs 25 grams, and making is ₹600 a gram.

Total tax: ₹6,000 on a pre-tax value of ₹1,90,000. That's an effective rate of about 3.16%. The heavier the making relative to the gold, the closer that effective rate creeps towards 5%.

A bill for this amount also crosses the ₹2 lakh line once you add a matching pair of earrings, which brings PAN requirements into play. See PAN card rules for buying gold before a big purchase.

Why does making attract a different rate?

Under GST, the gold itself is taxed as goods at 3%. Making is a labour or job-work element, and when a jeweller shows it as a separate line, it is taxed at 5%. That's the reason the brief rule is "3% on gold, 5% on making".

In practice, you'll see three styles of billing:

• Itemised: gold value, making, and two GST lines. This is the clearest and the easiest to check.
• Making as a percentage: "14% making" on the gold value. The GST treatment is the same; only the way making is quoted changes. Our guide on percentage versus per-gram making shows which works out cheaper.
• A single all-in price with "GST included". Ask for the break-up. You can't check the tax, or the gold rate, without it.

What about coins and bars?

A gold coin or bar from a bank or jeweller is mostly gold value with little or no making, so the 3% line does nearly all the work. If a coin carries a minting or design charge shown separately, expect that line to be taxed like making. On a 10 g 24K coin at an illustrative ₹7,600 a gram, the 3% GST comes to ₹2,280. Small, but it's money you don't get back when you sell, so count it as part of your cost.

Indian GST versus UAE VAT on the same piece

Now take the same 25 g necklace to a Dubai counter. Assume, for a clean comparison, the gold and making cost the same in rupee terms. Only the tax treatment changes.

Two things jump out. A UAE resident pays more tax in Dubai than an Indian buyer pays in GST. An eligible tourist pays much less, once the refund comes through. But the real gap between the two countries isn't in this table at all: it's in the gold rate, because Indian prices carry the import duty raised to 15% in May 2026. The full side-by-side, customs included, is in our UAE versus India gold tax comparison.

The Dubai VAT side is explained in depth in VAT on gold in the UAE.

What GST doesn't cover

People sometimes lump every gold-related tax under "GST". They're separate:

• Import duty is a customs charge on gold coming into India. It's already inside the Indian market rate, and it's what you pay at the airport on dutiable gold from Dubai.
• Capital gains tax applies when you sell gold at a profit. Held over 24 months, the gain is taxed at 12.5% without indexation; held 24 months or less, at your slab rate. See tax on selling gold in India.
• Income tax on gifts can apply to jewellery received from non-relatives above ₹50,000 in a year.

Your GST invoice still matters for all three. It proves the date, weight, purity and price, which is exactly what you'll need when you sell years later.

Three billing mistakes to catch at the counter

GST charged on the stone value at the gold rate

If a piece has stones, the gold rate should apply only to net gold weight. Stones are billed separately. Paying the gold rate on gross weight inflates both the price and the 3% tax line. Our guide on gross versus net weight shows how to spot it.

Rounding the gold rate up

Check the per-gram rate on the bill against the jeweller's board that day. A small upward rounding multiplies across every gram, and GST is charged on top.

No HUID on the bill

BIS hallmarking is mandatory for gold jewellery sold in India, with a 6-digit HUID on each piece. The GST bill is a good place to see the HUID recorded alongside the weight. You can verify it on the BIS CARE app.

Checking the gold value before you're billed

The 3% GST is only as fair as the gold value it's charged on. Before you visit a jeweller, it helps to know where international gold sits. Our live 22K Dubai rate is ₹11,223.97 per gram (AED 438.75), and the weights table below shows what common sizes cost at that rate, before any Indian duty, making or GST.

Indian jewellers' rates will be higher because of import duty and local premiums, so don't expect the two to match. The table is a reference point, not a quote. For a like-for-like comparison, follow the method in how to compare Dubai and Indian gold prices, or run numbers on the gold price calculator.

GST rates and rules are set by the GST Council and can be revised. Confirm the current rate with your jeweller's invoice or a tax adviser before a large purchase.

Before you sign the bill

1. Ask for gold value, making, and both GST lines shown separately.
2. Check the GST on gold is 3% and on making is 5%.
3. Confirm the gold rate applies to net weight only.
4. Look for the BIS logo, purity (such as 22K916) and HUID on the piece.
5. Pay by bank or card for bills of ₹2 lakh or more; cash at that level isn't allowed in one transaction.
6. File the GST invoice safely. You'll want it when you sell.