In India, the Goods and Services Tax (GST) on gold purchases is set at a flat rate of 3%. This applies to all forms of gold, including physical gold, jewelry, and gold coins. Whether you're buying 24-carat or 22-carat gold, the same GST rate applies. For instance, if you purchase gold worth ₹1,00,000, you would pay ₹3,000 as GST (1.5% CGST and 1.5% SGST). It's important to factor this into your budget when planning your gold purchases.

When purchasing gold jewelry, GST is applied not just to the gold content but also to the making charges. This means that if you buy a piece of jewelry, the total value of that piece—which includes both the gold and the cost of craftsmanship—will attract a 3% GST. For example, if the gold content is valued at ₹80,000 and making charges are ₹20,000, the GST would be calculated on the total amount of ₹1,00,000, resulting in a GST of ₹3,000.

On July 23, 2024, the Finance Minister announced significant reductions in customs duties on gold imports, which is expected to lower costs for consumers. The basic custom duty has been reduced from 10% to 5%, while the agricultural cess has decreased from 5% to 1%. Consequently, the total import duty has dropped from 15% to just 6%. This change aims to make gold more accessible and boost the market, providing better opportunities for consumers and jewelers alike.

No, there is a uniform GST rate of 3% applicable to all forms of gold in India, regardless of whether it's in the form of bars, coins, or jewelry. This consistency simplifies the taxation process for consumers and jewelers alike. Additionally, digital gold transactions also attract the same GST rate. This clarity in taxation helps consumers understand the total cost when making gold purchases.

Yes, jewelers have the opportunity to claim Input Tax Credit (ITC) on the gold they purchase as raw materials, as well as any job work charges incurred. This means that they can recover the GST paid on these inputs, which is beneficial for their business operations. Even when dealing with unregistered suppliers and paying taxes under a reverse charge mechanism, jewelers can still claim ITC, making it easier to manage their tax liabilities effectively.

Calculating GST on gold purchases is straightforward. For instance, if you're purchasing gold worth ₹1,00,000, you would calculate the GST as 3% of that total value. This would amount to ₹3,000, which consists of 1.5% CGST and 1.5% SGST. It's important to note that the introduction of GST has streamlined the taxation process compared to previous systems, making it easier for consumers to understand the total cost involved in buying gold.

HSN codes are essential for categorizing goods for tax purposes. For gold products, the relevant HSN codes are as follows: 7108 for Gold Bars and Ingots, 7113 for Jewelry Articles, and 7114 for Other Gold Articles. Each of these categories is subject to a GST rate of 3%. These codes help both consumers and businesses ensure compliance with tax regulations and facilitate better understanding during transactions involving gold.

Investment schemes such as Gold Exchange-Traded Funds (ETFs) and Sovereign Gold Bonds generally do not attract GST on the gold itself. However, any service charges associated with these investment products may incur GST at a higher rate of 18%. Therefore, when considering investments in gold through these vehicles, it's crucial to be aware of potential additional costs due to service charges, which can affect your overall investment returns.