If you want to invest in gold and silver, avoid buying jewelery. However, gold and silver have always been very important in terms of investment and jewelery in India. Every festival, marriage and special occasions increase the demand for gold and silver. But whenever a consumer buys gold or silver, its price is not only fixed in the market price, but the tax imposed on it also has a direct impact. The Goods and Services Tax (GST) is currently applicable on gold and silver, which affects their price.
According to government rules, gold and silver are 3% GST, that is, if the gold market price is Rs 1,00,000 per 10 grams, it will be charged an additional GST of Rs 3000. Similarly, 3% GST is also applicable to silver. In addition, 5% GST is taken separately as a making charge on jewelery. Because of this, consumers have to pay more than the real price while buying gold and silver jewelery.
GST rates applied to gold and silver-
Metal GST rate
Gold- 3%
Silver- 3%
For example, suppose the market price of gold is ₹ 1,00,000 per 10 grams. GST and making charge are added to this way. Gold base value: ₹ 1,00,000 3% GST: ₹ 3000 making charge (10%): 5% GST Making Charge at ₹ 10,000: ₹ 500
Total price = ₹ 1,00,000 + ₹ 3000 + ₹ 10,000 + ₹ 500 = ₹ 1,13,500, the customer will have to pay around ₹ 113,500 for 10 grams of gold jewelery according to this, while the original price of gold is only ₹ 100,000. Let us tell you, before GST was implemented, different states had different tax structures on gold and silver. VAT, excise and service tax were applicable in some places. But after the implementation of GST in July 2017, the tax system across the country was uniform. This has increased transparency for traders and consumers.
Taxation on gold and silver also affects investors. Since India is the biggest consumer of gold, the government earns it well. However, the industry has long been demanding that the GST rate on gold be reduced from 3% to 1%, so that both consumption and investment are promoted.
According to government data, India imports around 800 to 900 tonnes of gold every year. On adding customs and GST, the consumer has to buy very expensive gold.
Currently, 3% GST is levied on gold and silver and 5% on making charge. This tax structure puts additional burden on consumers’ pockets, but is an important source of revenue for the government.
