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The GST Council in its 56th meeting on Wednesday announced next generation GST reforms, simplifying the goods and services tax (GST) from the current four-slab structure of 5, 12, 18 and 28% to a two-rate structure of 5 and 18%. Meanwhile, a special 40% slab will be introduced for a select few items such as high-end cars, tobacco and cigarettes. These new GST rates will be effective from September 22 2025.
The GST system saw its biggest reform since its introduction on July 1, 2017. Most daily household essentials are likely to fall in lower tax brackets and will be cheaper once new rates come into effect.
As we read about GST slab changes and various items getting cheaper, the GST rate on gold and silver has been kept unchanged.
GST on gold and silver jewellery will remain unchanged at 3%, with an additional 5% on making charges. Meanwhile, Gold coins and bars will continue to have 3% GST. Hence, the GST 2.0 reforms will not have a direct impact on demand for bullion.
Check below calculation
When you buy 10 gram of gold jewellery in India, you pay 3% GST on the gold value and an additional 5% GST on making charges.
- Gold price: ₹10,650 per gram
- Total gold value (10 grams): ₹10,650 × 10 = ₹1,06,500
- Making charges (assumed at 10% of gold value): ₹10,650
- GST on gold (3% of ₹1,06,500): ₹3,195
- GST on making charges (5% of ₹10,650): ₹532.5
- Total GST: ₹3,195 + ₹532.5 = ₹3,727.5
- Total payable amount: ₹1,06,500 + ₹10,650 + ₹3,727.5 = ₹1,20,877.5
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