Is there a separate tax on making the charge along with the gold price? Know the rules before paying the bill

Gold Jewelery GST Rule: While buying gold, silver or diamond jewellery, customers are often confused about taxes. In many places it has come up that apart from the 3% on the price of gold, 5% GST has to be paid separately on the making charge. If a jeweler asks you for a separate tax on the making charges, you need to be careful. According to the Central Board of Excise and Customs (CBEC) rules, the customer does not have to pay GST separately on the making charge along with the cost of the jewellery. Whether the making charge is mentioned separately in the bill or included in the total price, the customer will be charged only 3 percent GST on the entire amount at the same rate.

Understand complete mathematics with examples

Questions related to Gems and Jewelery are answered in the Government’s GST Sectoral Series. Even if the gold chain’s bill mentions the gold price and the making charge separately, only 3 percent tax will be levied on the total transaction value.

This can be understood by a simple example. Suppose you bought a 10 gram gold chain. The gold price in this is Rs 1,28,000, while the making charge is Rs 12,000. Thus the total cost of the chain became Rs 1,40,000. As per government rules, 3 percent GST will be charged on this entire amount, which comes to Rs 4,200. If the shopkeeper adds 3 per cent (Rs 3,840) on gold plus separately 5 per cent (Rs 600) on making charges, the total tax comes to Rs. 4,440 will be. That means Rs 240 more will go directly from the customer’s pocket. This method is completely wrong as per government regulations.

Where did the talk of 5 percent GST come from?

5 percent GST is mentioned on the making charge in the market or on many websites. Actually, this 5 percent tax is not for general consumers, but relates to the transaction between the jeweler and the artisan (employer). When a jeweler gives raw gold to his artisan to make jewellery, this rule comes into play.

If the artisan is GST registered, he charges 5 percent GST on his wages i.e. job charges. The jeweler takes input credit of this tax, which he can use to pay tax on the sale of finished jewellery. At the same time, if the artisan is exempted from registration, the jeweler himself has to pay this tax under reverse charge. For this the industrialist also gets input credit. Therefore, this 5 percent tax is never added to the bill of a customer who buys ready-made jewelery from a showroom.

The rules have not changed even after GST 2.0

Major changes were made in the tax slabs under GST 2.0 in the 56th meeting of the GST Council held on 3 September 2025. However, the jewelery market was kept apart from this. The council retained the old rate of 3 per cent for the gems and jewelery sector. The current FAQ of Invest India also reiterates that only 3 percent of the total value of jewelery will be taxed.

This rule of 3 percent GST on gold and silver in the country is applicable from July 1, 2017. When VAT was removed and GST was introduced, there was a rule of collecting 3 percent tax from customers even on old stock lying with banks or agencies. Besides, 3 percent IGST is levied along with basic customs duty on import of precious metals from abroad, for which banks can take input tax credit. Customs duty on gold has been fixed at 15 percent from May 13, 2026.

Keep these things in mind while taking jewelery bill

While buying ready-made jewelery from the shop, the customer should only ensure that only 3% GST is charged on the total amount. According to this, a tax of Rs 4200 will be levied on jewelery worth Rs 1.40 lakh. While on a purchase of 2 lakh rupees, this amount will be 6,000 rupees. However, the rules may be different if you are getting jewelery made by giving away your old gold or getting jewelery repaired. In such cases, the basis of tax should be clearly asked from the jeweler before making the bill.