Gold & Jewellery under GST: Current Rates, Recent Reforms, and What to Know

An assortment of gold jewellery items including a bracelet, necklace, pendant, ring, and earrings, with text highlighting 3% GST on gold jewellery.
  • Gold (bars, coins, jewellery): 3% GST (1.5% CGST + 1.5% SGST) – no change.
  • Jewellery making charges: 5% GST.
  • Custom-made jewellery: 3% GST.
  • Jewellers had expected a rate cut, but GST Council retained current structure, leaving margins tight and consumer affordability impacted.

GST Reforms for Diamonds & Allied Products

  • Natural cut & polished diamonds up to 25 cents under DIAS:Exempt from IGST (earlier 18%).
    • Eases working capital pressures for small-diamond processors.
    • Boosts manufacturers & exporters competitiveness.
  • Jewellery boxes: GST reduced from 12% to 5%.
    • Cuts packaging costs for retailers/exporters.
    • Makes gifting/packaging more affordable for consumers.
  • Allied sector relief: GST cuts in handicrafts, leather goods, packaging → strengthens jewellery ecosystem.

Stakeholder Impact

  • Jewellers: Stability in gold tax rates, but benefit from lower box costs; no margin relief on gold jewellery itself.
  • Exporters & manufacturers (diamonds): Relief through IGST exemption on small diamonds improves liquidity and competitiveness in global markets.
  • Consumers: No relief on gold jewellery; but lower costs for jewellery boxes → affordability in gifting/packaging improves.
  • Government: Retains revenue from gold, but supports export sector competitiveness with targeted exemptions.

Short-Term Price & Market Outlook

  • Gold: Prices remain at record highs (₹107,630/10g for 24K), driven by global macro factors (Fed rate cut expectations, weak U.S. dollar, trade uncertainty). GST stance is neutral to prices but keeps costs high.
  • Diamonds & Jewellery exports: GST reforms provide cost relief and liquidity support, cushioning global pressures and boosting India’s hub status in diamond cutting and jewellery design.

Conclusion:

The GST Council’s mixed stance creates a two-track impact:

  • For gold jewellery – no tax relief, affordability remains a concern. The GST Council’s decision to maintain 3% GST on gold and silver and 5% on jewellery making charges provides stability but no boost to affordability. In the short term, gold prices in India will be driven more by global macroeconomic factors (Fed policy, dollar weakness, trade uncertainty) than by GST policy.
  • For diamonds & allied sectors – targeted GST cuts (IGST exemption on small diamonds, lower GST on jewellery boxes) reduce operational costs, boost exports, and strengthen India’s global competitiveness.

Together, these measures balance government revenue protection with sectoral support, stabilizing the domestic jewellery market while aiding exports.