GST Council leaves gold, silver rates untouched at 3%; what does this mean for the sector?

The much-anticipated Goods and Services Tax (GST) rate rationalisation has kicked in a significant overhaul of the indirect tax system, replacing the current four-tier structure with a simplified two-rate system of 5% and 18%, along with a special 40% slab for certain items. However, despite major changes in the broader GST structure, gold and silver rates remain unchanged under GST 2.0.

Gold attracts a 3% GST, irrespective of its form—jewellery, coins, or bars. In addition, a 5% GST is levied on making charges—the labour or craftsmanship involved in producing gold jewellery. This two-tier structure has been consistently in place since the introduction of GST in 2017.

“This consistency not only safeguards consumer confidence but also enables us, as jewellers, to plan long-term with greater predictability. While the broader economy will benefit from rationalised slabs, our industry values the assurance that comes with an unchanged tax structure. We expect this stability to support sustained growth, especially as we head into the festive and wedding seasons,” said Piyush Gupta, director at PP Jewellers by Pawan Gupta. 

“However, gold and silver merchants’ associations of various regions demand further reduction of GST on gold ornaments," said Nirpendra Yadav, senior commodity research analyst at Bonanza. If GST rates had been reduced, jewellery would have become slightly cheaper for customers. Although international markets primarily determine gold prices, GST has a direct impact on the final cost. Therefore, any reduction would have reflected on customers’ bills, thus boosting demand, especially during the festive season.

GST 2.0 is expected to result in a net revenue impact of around ₹48,000 crore, with buoyancy expected from increased consumption. It aims to simplify the tax regime and is expected to improve affordability and compliance. The new slabs will come into effect on September 22, coinciding with the start of Navratri.