As per GST, Gold bars or gold jewelry are included in definition of goods and GST rate on gold is prescribed . Selling of gold is considered as supply of goods as per Section 7. Further, goldsmith making charges are considered as supply of services.
What is the GST rate on Gold and diamonds?
For Diamonds:
| HSN Code | Particulars | GST % |
| 7102 | Rough diamonds or simply sawn diamonds, industrial or non-industrial | 0.25 |
| 7103 | precious stones (other than diamonds) and semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semi- precious stones, temporarily strung for convenience of transport | 0.25% |
| 7104 | Synthetic or reconstructed precious or semiprecious stones [other than diamonds], whether or not worked or graded but not strung, mounted or set; ungraded synthetic or reconstructed precious or semiprecious stones [other than diamonds], temporarily strung for convenience of transport; synthetic or reconstructed diamonds, unworked or simply sawn or roughly shaped | 0.25% |
| 7101,7106, 7107,7108, 7109, 7111, 7113, 7114, 7116, 7118 | Diamond, pearls, silver, gold or articles of jewelry of silver or gold, and so on, including synthetic or reconstructed stones, unworked or simply sawn or roughly shaped | 3% |
| 9988 | Job work in relation to cut and polished diamonds, plain or studded jewelry of gold, silver and so on | 1.5% |
For Gold:
The tax rate for gold items is 3% and for services like making charges or goldsmith charges are taxable @ 5%. 7.5% (excluding GST) custom duty, in case of gold imports.
For detailed GST rates, Click here.
Can taxpayer pay tax @ 3% on making charges?
Yes, taxpayer can pay GST @ 3% on making charges instead of 5%. If his supplies qualify under composite supply under Section 8.
Composite scheme means supplying two or more supplies, where one of them is main supply and other is naturally part of supply.
In case of selling gold, as gold itself is a taxable under GST as a goods and making charges or job work is a supply of services.
Whenever customer purchase the jewelry, the main supply is gold and making charges service is naturally part of supply. Hence the tax payable on total purchase value will be @ rate of 3% even if taxpayer shows making charges separately.
Where gold bar is supplied by customer to goldsmiths for making jewelry, then GST tax will be payable @ 5% and not at 3%. As making charges is only service provided and the same is main supply.
Do goldsmiths service charges attract RCM?
Many gold-merchants, sellers or jewelers engage goldsmith for job work or making jewelry. Then goldsmith will charge GST @ 5% on making or job work charges, if he is registered. Incase of unregistered goldsmith, the gold-merchants or seller will be liable to pay tax on reverse charge @ 5%.
GST is not applicable incase unregistered individual sell his gold or exchange for new ones at jewelry shops.
E-way bills rules for gold and jewelry:
The GST department has made e-way bill mandatory for making movement of gold or item covered under HSN chapter 71. The department has notified and make separate option for raising e-way bill for gold items.
E-way bill is mandatory for making movement within the state or sending to other states. However, Part B is not mandatory. Once transporter details updated, same cannot be changed.
No option to generate consolidated e-way bill. Other provisions like cancellation or rejection etc. are similar to normal e-way bill provision. Click here to know.
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11 December 2023 
