“Shop Smart This Festive Season — Know the GST on Your Gold and Gifts”

A festive shopping scene with a focus on gold gifts. Two women and a man are interacting outside a store, smiling and holding shopping bags. In the foreground, wrapped gold gift boxes with bows are displayed, contributing to the holiday atmosphere.

1. GST on Gold Jewellery

Legal Basis:
Under Notification No. 1/2017–Central Tax (Rate) dated 28.06.2017, as amended from time to time, jewellery items (gold, silver, diamonds, etc.) fall under Chapter 71 of the GST Tariff Schedule.

Applicable Rate:

  • Gold metal: 3% GST
  • Making Charges (value addition services): 5% GST

Practical Implication:
When purchasing gold ornaments:

  • The bill must show separate values for metal and making charges.
  • Always obtain a GST-compliant tax invoice as per Section 31 of the CGST Act, 2017 and Rule 46 of the CGST Rules, 2017.
  • BIS hallmarking ensures the genuineness of the gold; GST law does not exempt hallmarking or testing charges—they are taxed at the same rate as making charges.

2. GST on Other Gifts and Goods

Under Notification No. 1/2017–Central Tax (Rate) (as amended till 01.05.2022):

CategoryTypical HSN ChapterEarlier GST RateRevised GST Rate
Television sets, ACs, RefrigeratorsChapter 84, 8528%18%
Two-wheelersChapter 8728%18%
Small cars (≤1200cc petrol / ≤1500cc diesel)Chapter 8728%18%
Luxury carsChapter 8740% (including cess)40%
Mobile phones851718%18%

These rates reflect the GST Council’s intention to rationalize taxes under GST 2.0 reforms, ensuring affordability and uniformity.

3. GST on Gift Vouchers

Under Schedule II, Entry 1(b) of the CGST Act, 2017, vouchers are treated as “supply” only when redeemed.
Hence:

  • No GST at the time of purchase of the voucher.
  • GST is applicable when the voucher is redeemed for goods/services.

This gives flexibility for festive gifting and can optimize GST cash flow impact.

4. Key Compliance and Smart Festive Planning

  • Verify total price inclusive of GST before purchase to avoid overcharging.
  • Check the correct HSN code and rate on the invoice.
  • For high-value items (gold, electronics, vehicles), ensure supplier’s GSTIN is valid.
  • During festive offers, sellers often include discounts; GST should apply only on the discounted price as per Section 15(3) of the CGST Act.

Relevant Provisions & Notifications

ReferenceDescription
Section 9, CGST Act, 2017Levy and collection of GST
Notification No. 1/2017-Central Tax (Rate)Prescribes GST rates for goods
Notification No. 11/2017-Central Tax (Rate)Prescribes GST rates for services
Section 31 & Rule 46, CGST Rules, 2017Invoice requirements
Section 15, CGST ActValuation of taxable supply

Conclusion

For this festive season:

  • Gold jewellery continues at 3% on metal + 5% on making.
  • Gadgets, vehicles, and appliances may now attract reduced GST rates (18% for most standard goods).
  • Vouchers remain tax-neutral until redemption.

By understanding the GST implications, you can plan your festive shopping to remain compliant and cost-efficient.