Jewellery is one of the few trades with its own concessional GST rate — 3% on gold — sitting alongside a separate rate on making charges and a reverse-charge quirk on old gold. For a jeweller in Rajkot, Ahmedabad or anywhere in Gujarat’s strong bullion trade, getting the 3%/5% split and old-gold treatment right is what keeps the books clean.
The 3% and 5% split
Gold, and gold jewellery, are taxed at a concessional 3% GST. The making charges — the labour component of a piece — are taxed separately at 5%. A correct jewellery invoice therefore usually shows the metal value at 3% and the making charge at 5%. Getting this split right on every bill is the core of jewellery GST compliance, and our billing software is set up to apply both rates correctly.
Old gold and reverse charge
When a customer exchanges old jewellery, the treatment depends on who they are. A purchase of old gold from an unregistered individual customer is generally not taxed in the jeweller’s hands as a reverse-charge supply — but the position tightens when old gold is bought from dealers or as part of a business transaction, and when it is remade. This is the single most misunderstood area in jewellery GST, and we set your treatment up correctly so an exchange doesn’t create an unexpected liability.
Hallmarking, stock and input credit
Jewellers claim input tax credit on the GST paid on their gold purchases and on making/job-work charges, set off against the tax collected on sales. With mandatory hallmarking and high-value stock, clean invoice trails and stock records matter — both for GST and for scrutiny. We reconcile purchases to GSTR-2B monthly so credit isn’t lost, and keep your filing aligned with your stock movement.