Clearmytax Editorial Team
Is Gold Exempt?
No Gold is not exempt under GST Law and thus is subject to GST.
GST rate on Gold
1. GST on purchase of Gold Jewellery
If a customer purchases jewellery from a GST registered dealer, GST @ 3% will be charged on value of gold plus GST @ 5% will be charged on making charges of the jewellery.
In case of gold bars / coins there should be no making charges and entire value of gold will be taxed @ 3%.
It may also be noted here that import of gold attracts import duty @ 10%.
2. GST on sale of gold jewellery by a customer to Jeweller
In case the person selling the old jewellery is not registered under GST, no GST will be applicable on such sale as the same is not in furtherance of business.
3. GST on exchange of jewellery by a Customer
In such cases there are two transactions as under will be there:
- Sale of old jewellery by customer to jeweller: GST will not be applicable, if customer is not registered under GST law as such sale is not in furtherance of business.
- Sale of new jewellery by jeweller to customer. This shall be subject to GST @ 3% on value of gold and @5% on making charges. Further here GST will be applied on full value of new jewellery.
E.g: Rahul buys new jewellery worth Rs 1.50 lakh against which he gives in exchange old jewellery worth Rs 1 lakh to the jeweller. In this case GST will be charged on Rs 1.50 lakh i.e. full value of new jewellery. Further no GST will be applicable on sale of old jewellery by Rahul to the jeweller.
Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.