How Will GST Reforms Affect Gold Buyers This Festive Season?

The festive season is one of the most popular times for people to buy gold, whether as jewellery, coins, or bars. However, this year, the government’s new GST (Goods and Services Tax) reforms and import duty changes have drawn attention among gold buyers. While the import duties have been reduced, there is no change in the GST rates on gold.

Wondering whether these updates will make gold more affordable or costlier? Here’s everything you need to know about the impact of GST reforms on gold in 2025. We shall also understand how it affects gold in india and your purchase this festive season.

GST and Duty Rates on Gold in 2025

The GST rate on gold, under the new GST reforms of 2025, also known as GST 2.0, remains unchanged at 3%. This applies to all types of gold, including bars, coins, and gold jewelry. Also, making charges on jewellery continue to attract 5% GST, as they fall under the service category.

On the other hand, the 2025 Union Budget introduced favourable changes by lowering import tariffs on gold and jewellery:

• Basic Customs Duty (BCD): 5%

• Agriculture Infrastructure and Development Cess (AIDC): 1%

• Total effective import duty on gold: 6%

• Duty on imported jewellery and parts: Reduced from 25% to 20%

This change reduces the cost of importing raw gold and other materials for jewellers, which in turn lowers the overall cost of purchasing.

How Do These Changes Affect Gold Prices?

The GST 2.0 reforms don't influence the price of gold. However, a reduction in the fundamental customs duty and import duty on raw gold will affect the price of gold. This helps to keep domestic gold prices stable over the festive season when people want to buy gold jewellery, coins, and bars. It also allows registered jewellers to offer greater discounts, making gold jewellery more appealing to buyers in the country.

Additionally, gold jewellery exporters and merchants benefit from a lower working capital burden, supporting smoother operations in the gold import and supply chain.

However, the final price for gold is still primarily based on movements in the international market and its price around the world. 

What the Reforms Mean for Gold Buyers?

For buyers, the 2025 reforms provide greater clarity on the GST impact on gold prices and mild relief in costs:

• Stable Domestic Gold Prices: Reduced customs duty and basic customs charge on gold jewellery from other countries help keep gold prices consistent. It can be gold ornaments, gold coins, gold bars, and new gold jewellery during the festive season.

• Clear Tax Structure: The goods and services tax (GST) system under GST 2.0 ensures that the gold GST rate is clearly shown on invoices along with gold making charges. This makes it easy for domestic buyers to know how much GST is being charged.

• Transparency in GST Calculation: With GST applied uniformly across the country, buyers will know the price they will pay for gold. It applies to gold in its natural form, gold in digital form, or gold investment schemes. For example, you can invest in sovereign gold bonds, gold ETFs, or gold mutual funds.

In general, the adjustments to the GST and the Union Budget in 2025 will simplify processes. It will make it easier for people to pay their taxes while maintaining stable gold prices in India. This enables buyers of gold jewellery, physical gold, or gold instruments to make smart financial choices.

Tips for Buying New Gold This Festive Season

Before you make a gold purchase this festive season, keep the following points in mind:

• Verify GST Details on Your Bill: Ensure the GST charged is in line with the GST rate of 3% on the gold value and 5% on gold making charges. This will help you understand the GST impact on gold prices and the total price of your gold jewellery, gold coins, or gold bars.

• Shop from Registered Jewellers: To ensure your gold jewellery or gold ornaments are real, obtain the correct billing and the proper input tax credit. Also, purchase gold jewellery from GST-registered importers, jewellers, or registered dealers.

• Compare Prices: Check domestic gold prices alongside international market trends to ensure you are getting a fair deal on imported gold or physical gold.

• Explore Gold Investment Options: Invest in gold mutual funds, gold ETFs, sovereign gold bonds, and other gold investment plans to spread out your investments. Also, these are a safe alternative to buying physical gold or new gold jewellery.

To Conclude

The GST 2.0 reforms have simplified taxation and made buying gold easier. Though GST rates remain at 3% for gold and 5% for making charges, lower import duties help stabilise prices. This may lead to slightly reduced costs for gold buyers this festive season.

So, whether you are buying gold jewellery, coins, bars, or investing in digital gold, the new regime ensures clarity and transparency in your purchase.

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FAQs

Do I have to pay GST again when exchanging old gold jewellery for a new one?

No, GST is generally charged only on the difference in value between the old gold jewelry and the new gold jewellery when exchanged through a registered jeweller.

Does GST apply if I buy digital gold online?

Yes, a 3% GST on the gold value is charged when you buy digital gold online.

Can jewellers claim input tax credit on the gold they use to make ornaments?

Yes, GST-registered jewellers can claim input tax credit on the GST paid for raw gold and making charges used to manufacture gold jewellery.

Does buying from an unregistered gold merchant affect the GST charge?

Yes. If the seller is not GST-registered, you will not receive a valid GST invoice or be able to claim input tax credit. This makes the transaction less secure for buyers.