How much GST will you pay on gold, silver jewellery after GST 2.0 reforms?

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 are 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

MCX Gold futures saw strong traction this week as the gold rate in the futures market rose 3.76% to close at a new lifetime high at ₹1,07,728 per 10 gram. Gold prices rose, supported by weakness in the US dollar, which made the yellow metal cheaper in foreign currencies, leading to higher demand. Market expectation of a US Fed rate cut by 25 basis points in its upcoming meeting on September 17 also bodes well for the gold demand.

Meanwhile, benchmark indices closed higher this week, reacting to the GST 2.0 reforms and other key global events like China's plan to cut its steel production between 2025 and 2026 to tackle overcapacity.

NIFTY50 surged 314.15 points, or 1.3%, during the week, while the BSE SENSEX gained 901.11 points, or 1.11%. Among NIFTY50 stocks, Mahindra & Mahindra (+11.3%) emerged as the top gainer of the week, followed by Tata Steel (+8.5%), Eicher Motors (+7.8%), Bajaj Finance (+6.8%), and Hindalco Industries (+5.7%). HCL Technologies (-2.5%), Wipro (-2.3%), Cipla (-2.3%), Infosys (-1.7%), and HDFC Life Insurance (-1.6%) were NIFTY50 top losers.

On the sectoral front, NIFTY Metal (5.8%) led the gains, followed by NIFTY Auto (5.4%) and NIFTY Consumer Durables (3.2%). Meanwhile, NIFTY IT slipped 1.6%.