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New GST on Gold Biscuits, Coins, Ornaments & Making Charges in 2022

New GST on Gold Biscuits, Coins, Ornaments & Making Charges in 2021

Gold in India

Today we are going to cover GST on Gold Biscuits, Coins, Ornaments, etc in India, what GST rate is applicable on varied gold products along with the GST role in the import and export of the metal. Let’s get dive into the topic:

GST refers to goods and services tax. It is an indirect tax that has replaced multiple taxes like VAT, excise duty, services tax, etc. GST came into effect on 1st July 2017 and is applicable to the supply of goods and services.
As we know manufacturing to sell any goods involves multiple stages.
At each stage, value-addition happens so GST gets charged at each state hence GST achieves the ideology of “One nation one tax”.
Having uniform GST eliminated the cascading effect of multiple indirect taxes. Consequently, resulted in overall competitive pricing across India.

Once GST came into effect it did impact our favourite metal Gold. Thus, Gold is levy with a 3% tax on the value of the metal and a 5% making charge under the GST.

Also Read State Bank of India – Gold Coins Scheme | Features | Benefits | FAQs

How to Calculate GST for Gold?

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Let’s understand different scenarios which as a customer you may come across and one should be aware of how much GST will be calculated and at what rate.

DescriptionGold ParticularsPre-GST PricePost-GST Price
Gold Price50gms23750002375000
Custom Duty10%237500237500
Service Tax1%26125Nil
GST3%Nil78375
VAT1.20%31663.5Nil
Total Price to be Paid for Gold Metal2670288.52690875
In case of Jewellery, making fee will be applicable
Labour Charges10%237500237500
GST on Labour Charges5%Nil11875
Total Price to be Paid for Gold Jewellary2907788.52940250

In the GST era in addition to the GST rate, gold will attract customs duty of 10% and making charges of 5%. Customs duty of 10% is prevalent prior to the implementation of GST. However, the GST on labour charges has been introduced at 5% recently. Hence, the cost of gold and gold jewellery will be comparatively high in the GST era.

Also Read India Post Gold Coin – Gold Coin Rate | Can I Purchase Gold Coin from Post Office?

GST on Gold Biscuits, Coins, Ornaments & Making Charges

Here is a look at the GST rate applicability on different forms of Gold:

ParticularsGST Rate
Gold Biscuits3%
Gold Coins3%
Making Charges5%
Gold Jewellery3% on Gold Metal+ 10%-30% Making charges on Gold Value+ 5% on Making Charges
Digital Gold3%
Sovereign BondNil
GST on Gold Biscuits, Coins, Ornaments and Making Charges

Also Read Is Digital Gold a Good Investment? Is it Safe to Invest in Digital Gold?

GST on Imports & Exports of Gold

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Currently, gold is subjected to 7.5% & a separate cess of 2.5% along with 3% GST.
As a result, the total duty and tax implication will be 13% as compared to 15.5% after slashing the import duty.
If we take a look at big figures then gold trading accounts for 6% of the country’s GDP which leading unauthorized smuggling of gold to avoid import duty. With the slashing of the duty definitely, the revenue of Govt of India improved.

However, to promote export, India does not impose any export duty on the supply of any goods and services and Gold comes under its regime.
This change has minimized the tax burden on Indian exporters of gold jewellery and probably made Indian gold exports more competitive on the world market.

Also Read SBI Gold FD – Features | Types | Interest Rate | Applying Procedure Gold?

FAQs

Do I have to pay GST while selling gold?

No, as a customer you don’t have to pay any GST in case selling your gold to a jeweller in exchange for money.

Can we get a GST refund on the gold purchase?

No, we cannot get a refund on the gold purchase.

Is GST applicable on Old gold?

GST is not applicable on the sale of old gold.

How much gold is tax-free in India?

Only gold gifts up to Rs.50000 in a year are tax-free. Capital gain liability only arises in the case of the sale of gold gifts and that attracts a hefty tax of 20% with indexation benefit.

How much gold can I sell without reporting?

You can avoid taxes on the sale of gold as it’s considered capital when you hold it. Depending upon the holding tenure you will be liable to pay short term or long terms capital gain taxes.

How do I avoid capital gains tax on gold?

You can avoid a capital gain tax on gold. This gain arises only from the sale of goods if it results in profits then you’re bound to pay taxes depending on the holding tenure.

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