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The amount on a gold-jewellery bill is not just the quoted gold rate. Check purity, net gold weight, the seller’s making-charge method, discounts, GST and the final invoice total. For a normal retail sale to an end consumer, GST is 3% of the total transaction value, including making charges, whether those charges are shown separately or not.
Import duty is a separate question. Passenger-baggage concessions, a domestic retail purchase and a commercial shipment follow different rules. A rate quoted for one situation cannot be applied automatically to another.
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What to ask for before accepting a jewellery quote
Ask the seller for an itemised written quote. A useful quote should identify:
- Gold purity or carat, such as 22K, and whether the article is hallmarked.
- Gross weight and net gold weight, with the weight of stones or other non-gold material separated.
- The gold rate used, including the date or pricing basis.
- Making charges and the method used to calculate them.
- Any discount, wastage line, stone value or other added amount.
- The taxable transaction value, GST amount and final payable total.
- Invoice details and the seller’s return, exchange or buyback terms.
There is no government-fixed or market-wide making-charge percentage established by the official material cited here. Sellers may use a fixed amount, a per-gram rate or a percentage. Compare like with like: the same purity, net gold weight, valuation basis and final amount after discount and GST.
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How GST applies to a retail jewellery purchase
The Central Board of Indirect Taxes and Customs (CBIC) states in its Gems and Jewellery GST FAQ: GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not.
That means a retail buyer should not be charged 3% GST on the gold value and then 5% GST on making charges as a second retail calculation. The taxable base is the transaction value of the jewellery sold to the end consumer.
CBIC’s illustration
CBIC’s FAQ uses a gold chain with a total value of ₹30,000: ₹28,000 for the gold and ₹2,000 in making charges. Applying 3% to the full ₹30,000 gives ₹900 GST, making the illustrative amount after GST ₹30,900. This is a tax illustration, not a current gold price, a prescribed making charge or a market average.
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What the rate schedule says
CBIC’s GST rate schedule places precious-metal jewellery under heading 7113. The schedule shows 3% IGST for an inter-state supply, or 1.5% CGST plus 1.5% SGST or UTGST for an intra-state supply. The split depends on the nature of the supply; the combined retail rate remains 3%.
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Use this calculation on your own quote
- Add the seller’s gold value, making charge and any other taxable jewellery line items to obtain the transaction value.
- Subtract only discounts that are actually shown and accepted in the invoice calculation.
- Apply the 3% retail GST treatment to the resulting total transaction value.
- Check that the invoice’s taxable value and GST arithmetic produce the amount the seller is asking you to pay.
Do not assume that a separately printed making-charge line has a separate retail GST rate. The CBIC rule specifically covers the case where making charges are shown separately.
Why the 5% job-work rate is different
CBIC separately describes a registered job worker who receives gold as raw material from a principal and returns finished jewellery. In that arrangement, the job worker pays 5% GST on the job charges. The principal owns or supplies the gold; the job worker is providing a manufacturing service.
A consumer buying a finished chain, ring or bangle from a jeweller is in a different transaction. The 5% job-work treatment should not be added to the retail bill as 5% GST on making charges on top of 3% GST on the gold. If a seller presents such a calculation, ask which transaction structure and CBIC provision they are applying, and request a corrected itemised invoice where appropriate.
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Making charges: compare the method, not just the percentage
Making charges can be quoted in several ways. A percentage may look low on a lightweight piece but produce a different result from a per-gram charge on a heavier piece. A fixed amount may be attractive for one design and expensive for another. The official sources do not establish a representative current average, so an advertised “normal” percentage is not a government benchmark.
Questions that expose the real cost
- Is the charge fixed for the article, calculated per gram, or calculated as a percentage of gold value?
- Is the calculation based on gross weight or net gold weight?
- Are stone-setting, enamel, polishing or design fees included?
- Is a discount reducing the making charge, the gold value or the total before GST?
- Will the same formula be used if you exchange or return the article?
For two pieces that appear similar, align purity, net gold weight, quoted gold rate, making-charge method, discounts, GST, hallmark information and final invoiced price. Comparing only the headline making-charge percentage can produce the wrong result.
Old gold, exchange and the GST question
CBIC says an individual’s sale of old jewellery to a jeweller is not a supply when the individual is not selling it in the course or furtherance of business. That treatment can matter when a household member disposes of personal jewellery.
CBIC’s FAQ separately says that an unregistered supplier’s sale of old jewellery in the course of business is subject to reverse charge. Do not extend the individual-sale answer to dealers, business sellers or every exchange structure. Ask the jeweller to explain how the old item, its assessed value and the new purchase are recorded on the invoice.
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The Bureau of Indian Standards (BIS) recommends using the Verify HUID facility in the official BIS CARE mobile app to check hallmarked gold jewellery. HUID is the unique identification associated with the hallmarking record.
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- Locate the hallmark and HUID on the article or its required marking.
- Open BIS CARE and use Verify HUID.
- Check that the result corresponds to the article being offered, including the stated purity.
- Match purity and net weight on the item and verification result with the invoice.
- Keep the invoice, hallmark details and verification record with your purchase documents.
Do not treat a marketplace listing, a seller’s description or a photograph as independent BIS verification. Verification is performed on the actual item and its HUID.
Remedy for a purity shortfall
BIS states that if hallmarked jewellery is found to be below the marked purity, the buyer is entitled to compensation equal to twice the amount of the purity-shortage difference calculated for the sold article, plus testing charges. Preserve the invoice and have the article tested through the applicable BIS process if a dispute arises.
When import duty is relevant
Import duty does not apply merely because jewellery is expensive or because its gold originated outside India. The applicable rules depend on whether you are buying from a domestic jeweller, carrying gold as passenger baggage or importing commercially.
Passenger baggage guidance
Mumbai Customs Zone III guidance, last updated 13 October 2026, describes a concession for a passenger of Indian origin or a passenger with a valid Indian passport who has stayed abroad for at least six months. The guidance allows up to 1 kg of gold in the stated categories, subject to the notification’s conditions and payment in convertible foreign currency.
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| Passenger situation in the Mumbai Customs guidance | Listed rate | Important qualification |
|---|---|---|
| Eligible passenger meeting the origin or passport, stay and other conditions | 6% | Applies to specified gold brought within the stated baggage concession; the notification’s conditions control. |
| Other passengers in the listed categories | 36% | The guidance lists this for gold bars and other gold forms including unstudded ornaments; studded ornaments are excluded from that latter listed category. |
These are passenger-baggage figures, not a universal domestic retail tax and not a single rate for every imported jewellery shipment. Eligibility, quantity, form of gold, declaration, currency and the current notification must all be checked before travel.
Commercial imports
CBIC Notification No. 45/2025-Customs, dated 24 October 2025, includes a 5% basic customs duty line for gold in specified tariff entries. That 5% component is not automatically the total amount payable by a commercial importer. Tariff classification, country of origin, additional duties, exemptions and later amendments can change the calculation.
The official material cited here does not establish one current rate for every commercial import of finished jewellery. A business importing commercially should verify the exact tariff heading, origin documents and current customs notification with Customs or a qualified customs adviser. Do not use the passenger 6% or 36% figures for a commercial invoice.
A practical purchase workflow
- Specify the article. Record purity, design, gross weight and expected net gold weight.
- Request the quote in writing. Ask for the gold rate, gold value, making-charge method, stone or other line items and discounts.
- Recalculate the taxable total. Confirm what amount the seller treats as the total transaction value.
- Check GST. For a normal end-consumer retail sale, verify the 3% calculation on the total transaction value.
- Verify hallmarking. Inspect the hallmark, check the HUID in BIS CARE and match the result to the article.
- Review the invoice. Confirm purity, net weight, seller details, taxable value, GST and final amount.
- Read after-sale terms. Check return, exchange, deduction, buyback and valuation rules before paying.
- Separate import questions. If the article is coming from abroad, identify whether it is passenger baggage or a commercial import and apply the relevant customs rules only.
Common mistakes to avoid
- Assuming every jeweller uses the same making-charge percentage.
- Comparing two prices without equalising purity and net gold weight.
- Accepting a 5% GST line on retail making charges because a job-work example was mentioned.
- Applying a passenger-baggage concession to a commercial shipment.
- Treating the 5% basic-duty line in a customs notification as the complete import bill.
- Assuming an individual’s non-business sale of old jewellery has the same treatment as a dealer’s business sale.
- Relying on a seller’s hallmark claim without checking the item’s HUID.
- Paying before obtaining an invoice that shows the calculation and final total.
The buyer’s decision rule
Choose the quote that remains competitive after you align purity, net weight, gold rate, making charges, discounts, GST and all other line items—not the quote with the lowest advertised making-charge percentage. For a domestic retail purchase, the key tax check is 3% of the total transaction value. For old gold, identify whether the seller is dealing with a private individual or a business. For imported gold, identify the legal route first, then verify the current customs conditions and classification.
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