Buying Gold on Dhanteras 2025: Check out GST on Gold!

The Gold Rate as on 17/10/2025 in India for 24 karat gold is ₹13,292/- per gm, for 22 karat gold is ₹12,185/- per gm & for 18 karat gold is ₹9,722/- per gm. 

Buying gold near Dhanteras and Diwali week is one of the traditions in India. People used to invest in Gold’ coin, jewellery, bars, biscuits, etc but faced multiple confusion about the taxation of Gold. In this blog, we will discuss in detail how Gold is taxed in India, GST on Gold HSN Codes, GST Calculation on Gold Purchase, etc. 

Note: The information provided in this blog is accurate as of 17/10/2025. GST rates and rules are subject to change as per updates from government authorities. For the latest information, please refer to the GST Official Website. 

GST on Gold Purchase

Purchasing Gold in India levied 3% GST on its total value but 5% gst rate levied on its making charges. It doesn’t mean buyers need to pay separate 5% making charges. Let’s understand GST Calculation on Gold Purchase in detail with an example:

If you purchase a Gold chain at a total value of ₹1 lakh including gold value of ₹90,000/- & making charges ₹10,000/-. In this case, GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not. 

So, Total GST on Gold Purchase will be ₹3000/-. 

GST on Gold HSN Code 

Depending on the HSN Code classification of the gold, GST Rate on Gold is summarised below for ease of reference:

Gold Investment Option In 2025 

Purchasing Gold is not just about jewellery but considered as one of the safest & traditional methods of investment in India. However, with the flow of time, multiple Gold Investment options are available in the market. Let’s understand these modern Gold Investment options in 2025 in detail along with GST Implication on them:  

1. Fintech Gold Investment: Fintech apps offer Gold Investment instantly without purchasing physical gold. These apps include Paytm, PhonePe, Google Pay, etc. Investing in Fintech/Digital Gold also needs to pay 3% GST, the same as physical gold. 
2. Gold ETFs: Gold ETFs or Gold Exchanged Traded Funds are tradeable on the stock exchange and backed by Gold. There is no GST applicable on Gold ETFs purchase, however, capital gains tax is levied at time of sale. 
3. Sovereign Gold Bonds (SGBs): SGBs are another digital way to invest in Gold without its physical presence. SGBs are issued by the RBI (Reserve Bank of India) on behalf of the Government of India. SGBs are the government securities denominated in grams of Gold. There is no GST levied on purchase of Sovereign Gold Bonds (SGBs).

Impact of GST on Gold Price 

In India, GST has made the tax structure more uniform and simplified the previous complex indirect tax system. Also, GST made the Gold Price Rate more transparent for Gold Buyers. However, there are some major impact of GST on Gold Price as follow: 

• More Transparency: Purchasing Gold now becomes more transparent through invoices clearly showing Making Charges & GST components. 
• Uniform Taxation: Instead of multiple taxes (VAT, excise duty, etc) there is only one 3% GST applied on Gold across the country.
• Ensure Purity: Jewelers are required to issue proper invoices and follow hallmarking  norms ensuring more purity checks.

Frequently Asked Questions (FAQs)  

Q. Does Gold have 12% GST? 

A. No, there is only 3% GST (1.5% CGST & 1.5% SGST) levied on the total value of Gold purchase in India. 

Q. Is it mandatory to pay GST on Gold? 

A. Yes, it is mandatory to pay GST on Gold in India. Purchasing gold without paying GST is completely illegal. Also, in some cases, if gold is imported applicable customs duty will be levied as well.

Q. Is gold ETF taxable in India? 

A. No, purchases of Gold Exchanged Traded Funds are not taxable in India but capital gains is applied at the time of sale of Gold ETFs. 

Q. How to calculate GST on purchase of Gold? 

A. To calculate the GST on Purchase of Gold, you need to add on Total Gold Value & GST on Total Gold Value. Calculate these amount as follow: 

• Gold Value = Gold Rate per Gram × Weight of Gold
• GST on Gold Value = Gold Value × 3%

Q. Is GST Applicable When Selling Old Gold?

A. No, GST is not applicable when an unregistered person is selling old Gold. However, GST will be levied on the sale made by a registered seller. The person who is purchasing that Gold. 

Q. Does the GST rate on gold vary based on carat (e.g., 22k vs. 24k gold)?

A. No, the GST Rate on Gold does not vary based on carat. Only 3% GST is applied on all (18k, 22k, 24k) carats of gold all over India.