Gold has always been an appealing investment option for Indians. It is an expensive metal, but people still love it. With the Goods and Services Tax (GST) implementation in India, buying and selling gold has become more transparent and streamlined.
In this blog, we will take you through a comprehensive guide about GST on gold items in India and explain how to calculate the GST charge on gold on your next purchase.
Rates for GST on gold are as follows:
Calculating GST on gold is a relatively simple process. The GST is calculated as a percentage of the total value of the gold transaction, which includes the value of the gold and any additional charges such as making charges, taxes, and other levies.
To calculate the GST charge on gold, you need to follow these steps:
For example, if you are buying gold jewellery worth ₹ 50000, and the making charges and taxes amount to ₹ 5000, the total value of the transaction would be ₹ 55000. The GST charge on the transaction would be 3% of ₹ 55000, which is ₹ 1650. Therefore, the final price you would pay for the gold jewellery would be ₹ 56650.
Understanding the GST charge on gold is vital for anyone buying or selling gold or gold jewellery in India. By following the steps outlined in this article, you can easily calculate the GST charge on your gold transactions and ensure that you are paying the correct amount of GST. Additionally, keeping track of the GST input credit can help you save money on your gold purchase in the long run.
The GST for 1 gram of gold depends on the prevailing rate of GST at the time of purchase. In India, gold attracts a 3% GST rate as of May 2023. Therefore, if the price of 1 gram of gold is ₹ 5000, the GST payable would be ₹ 150 (5000*3%)
GST is calculated on the value of goods or services being supplied. The formula for calculating GST is as follows:
GST amount = (Value of supply x GST rate) / 100