GST 2.0 Clarifies Gold Tax: 3% GST on Gold and 5% on Making Charges Remain Steady Amid Reform

GST on Gold Remains Unchanged Amidst GST 2.0 Reforms in India

The Goods and Services Tax (GST) Council recently unveiled GST 2.0 reforms aimed at simplifying India’s indirect tax regime by consolidating multiple GST slabs into mainly two broad rates of 5% and 18%, effective from September 22, 2025. While these reforms promise lower tax rates for many essential goods and relief for households and businesses, the GST on gold and silver remains notably untouched, providing clarity and stability to the precious metals market ahead of the festive season.

Gold and Silver GST Rates Steady at 3%

In the Council’s 56th meeting held on September 3, 2025, it was decisively announced that gold and silver will continue to attract a GST of 3% on their transaction value. Additionally, the jewellery making charges will persist at a 5% GST rate. This means buyers of gold jewellery, coins, and bars will not see any change in the tax incidence due to the GST 2.0 reforms.

This strategic decision keeps bullion taxation stable amid broader tax rationalization, ensuring that consumer sentiment and trade patterns around gold remain consistent during one of the peak buying seasons in India. It also avoids introduction of any uncertainty in pricing at a time when gold holds cultural and investment significance for millions.

Simplification but Selective Impact

The GST 2.0 structure simplifies the old four-slab tax system (5%, 12%, 18%, and 28%) to primarily two slabs—5% for essential and low-value goods and 18% for goods and services considered standard. A distinct 40% GST slab has also been introduced for luxury and sin goods like high-end cars, tobacco products, and premium aerated drinks.

However, precious metals such as gold and silver have been consciously excluded from these changes to maintain continuity and predictability. Most everyday use items and many consumer goods will benefit from lowered taxes, but gold investors and jewellery buyers will continue to transact under the established rates.

Market Reactions and Future Outlook

Following the announcement, gold futures on MCX (Multi Commodity Exchange) saw a mild decline as investor focus partially shifted to equities and higher risk assets, benefiting from reduced taxation on other goods. However, the stability in gold’s GST rate offers reassurance for both buyers and retailers about pricing confidence through the festival period and beyond.

For jewellery buyers, this means their purchases will remain fairly priced on the tax front, with no immediate relief but no unexpected hikes either. For investors, gold’s price movement will continue hinging primarily on global demand-supply dynamics, currency fluctuations, and central bank policies rather than domestic tax reforms.