Understanding GST on Gold: FAQs Answered

Gold is one of the most popular investment options in India. But with the implementation of GST, there has been a lot of confusion on how it affects gold transactions. In this article, we will answer some of the most frequently asked questions on GST on gold.

What is GST?

Goods and Services Tax or GST is a unified tax system that replaced all other indirect taxes in India. GST is applicable to all goods and services except for alcohol and petroleum products. It is a value-added tax system where the tax is levied on the value added at each stage of production or distribution.

Is GST applicable on gold?

Yes, GST is applicable on gold. The current GST rate on gold is 3%. This tax is levied on the value-added by the jeweler or dealer on the sale of gold jewelry or coins. The tax is also applicable on making charges.

What is the GST applicable on gold coins?

The GST rate on gold coins is also 3%. However, there is an exception for gold coins that are sold by a bank or the authorized dealer of the government. In this case, no GST is applicable on gold coins.

Is GST applicable on gold biscuits?

Yes, GST is applicable on gold biscuits. The GST rate on gold biscuits is also 3%. However, if the gold biscuits are of 99.5% purity or higher, the GST rate is 0.25%.

Do I have to pay GST on old gold?

No, GST is not applicable on old gold. Old gold refers to gold that has been previously owned and has been sold or exchanged. In such transactions, GST is not applicable.

What is the GST applicable on gold exchange traded funds (ETFs)?

Gold ETFs are treated as financial products and are classified as securities. Therefore, the GST is not applicable on gold ETFs.

Is GST applicable on gold import?

Yes, GST is applicable on gold imports. The GST rate on gold imports is 3%. This is in addition to the basic customs duty and other taxes that may be applicable.

Conclusion

In short, GST is applicable on gold transactions in India. The current GST rate on gold is 3%. However, there are exceptions for gold coins sold by banks or the authorized dealer of the government, and for gold biscuits of 99.5% purity or higher. Old gold and gold ETFs are exempt from GST. If you are dealing with gold and have any doubts or queries, it is always advisable to consult a tax expert.