GST on Gold in India: What Buyers Need to Know
With the implementation of the Goods and Services Tax (GST), taxation on gold in India has undergone major changes. A uniform GST rate of 3% now applies to both 24-carat and 22-carat gold, impacting all physical gold purchases, including jewellery, coins, and bars.
Key Highlights
- GST on gold (24k, 22k, jewellery, coins, bars): 3% on the value of gold.
- Import duty: Reduced significantly from about 15% to around 6%. - Digital gold: Also attracts 3% GST.
-Gold investment options: Gold ETFs, Sovereign Gold Bonds, and gold mutual funds are not taxed on gold itself, but related service or management fees attract 18% GST.
-Input Tax Credit (ITC): Jewellers can claim ITC on gold and job-work charges, but not on gold coins given as promotional gifts or incentives.
-Second-hand gold: When purchased from unregistered individuals, GST is payable only on the profit margin under the margin scheme, and ITC is not available.
GST Rates on Different Types of Gold
- 24-carat gold: 3% GST
-22-carat gold: 3% GST
-Digital gold: 3% GST
-Gold investment schemes: No GST on gold value; 18% GST on service charges
These changes aim to simplify gold taxation while ensuring transparency and compliance across the gold market.
