GST is applicable on Gold and Jewellery made out of Gold. GST on Gold is 3% and additional 5% GST would be applicable on making charges. Thus, GST will be applicable on both – Gold @ 3% and well as making on making charges @ 5%.
Example – You purchase a necklace in which value of Gold is Rs. 100000 and Making Charges is Rs. 5000. In such case calculation of GST and value of Jewellery would be as follow-
|GST on Gold||3,000 (1,00,000*3%)|
|Value of Gold||1,03,000|
|GST on Making Charges||250 (5000*5%)|
|Value of Making Charges||5,250|
|Value of Jewellery||1,08,250|
GST on gold imported from outside india
If gold is imported out of India, NO GST will be applicable however, custom duty @10% will be applicable on the value of imported goods. Thus, when a gold is imported out of no GST is payable but you have to pay custom duty @ 10% on value of gold/jewellery as the case may be.
Import of Raw Gold or Semi Raw Gold by Registered Business/ Person –
If Raw Gold, Semi Gold and even Jewellery is imported by the registered business or person then also Custom duty @10% will be applicable, the custom duty shall be added to the cost of imported gold, the indene of which shall be passed to the end user. Also, GST shall be applicable on Custom Duty while making sale of Imported Gold in India. The Situation can be understandable form the following example.
Example – XYZ ltd. Imported Raw Gold from UAE for Rs. 100000 on which Custom Duty @ 10% will be Applicable. Mr. A (an end user) buys jewellery made out of Imported Goods from XYZ Ltd.
XYZ Ltd. Apart from cost of gold charged Rs. 10000 as making charges. What will be the Cost of Jewellery to Mr A
The Calculation of Cost of Jewellery to Mr A is as follow:
|Value of Imported Gold||1,00,000|
|ADD: Custom Duty||10,000 (1,00,000*10%)|
|Total Cost of Gold to XYZ Ltd.||1,10,000|
|Value of Gold to be sold to Mr. A||1,10,000|
|ADD: GST @3%||3,300|
|Value of Gold for Mr. A||113,300|
|ADD: GST on Making Charges||500|
|Total Making Charges||10,500|
|Cost of Jewellery to Mr. A||123800|
Things to be kept in mind while making Purchase of Gold/ Jewellery
These things will save you from payment of extra Tax then required
Adornments are typically made utilizing 22KT, 18KT and 14KT gold. Lower the nature of gold – Lower the price will be and lower GST as well.
If any Stone, Gems, Diamonds, etc. are included in Weight and Value of Jewellery make sure that Such Stone, Gems, Diamonds, etc. shall be weight and valued separately as their tax treatment is separate from Gold.
Prices of Gold are tend to daily fluctuations, so check the price of gold before making purchase.
Ensure the Jewelery/ Gold you purchased is hallmarked/BIS certified.
Hope you will able to understand the impact of GST on Value of Gold and Jewellery. Please Share the post if you find is useful. In case you have any message or query, you can comment the same below.