GST 2.0 Leaves Gold, Silver Jewellery Untouched at 3% Amid Wider Tax Cuts
- 4th September 2025
- 01:00:00 PM
- 3 min read
Summary
GST 2.0, effective September 22, simplifies India’s GST structure but leaves gold and silver jewellery unchanged at 3% with 5% on making charges. Gold coins and bars remain at 3%. MCX gold and silver futures slipped as investors shifted to equities, while jewellery buyers gain clarity and stability ahead of the festive season.
Mumbai | September 4 – The GST Council’s landmark GST 2.0 reforms have overhauled India’s indirect tax regime, but the levy on gold and silver jewellery remains unchanged at 3%, with 5% GST continuing on making charges. Gold coins and bars also stay in the 3% bracket, ensuring stability for bullion even as other sectors gain relief.
The new system, effective September 22, 2025, collapses the old four-slab structure into just two rates of 5% and 18%, while introducing a 40% slab for luxury and sin goods such as high-end cars, tobacco and aerated drinks. Most essentials, autos, durables, healthcare and insurance will benefit from lower taxes, but bullion has been excluded from the reform-driven cuts.
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GST on Gold and Silver Jewellery Under GST 2.0
The tax treatment for jewellery remains as before: 3% GST on gold and silver jewellery, 5% on making charges, and 3% on coins and bars. While buyers had anticipated some relief, policymakers preferred continuity in bullion taxation, especially with festive demand ahead. For households, this means jewellery purchases will not become cheaper due to GST 2.0, unlike consumer goods and services where costs are set to fall.
Market Reaction and Equity Flows
Bullion markets registered a muted response as investors rotated into equities on expectations of stronger consumption. MCX Gold October futures fell 1.1% to ₹1,06,086 per 10 grams, while MCX Silver December futures declined 1.2% to ₹1,24,277 per kg. Analysts said that GST 2.0 has increased investor appetite for riskier assets, weakening near-term interest in safe havens.
Equities, in contrast, moved higher. At 11:30 am, the NIFTY50 was up 0.4% at 24,822, while the SENSEX gained 0.4% at 80,958. Auto, FMCG and financial services led the gains, reflecting the direct benefits of tax cuts, while IT and oil & gas traded lower. The divergence underscores how GST 2.0 has shifted sentiment away from bullion towards consumption-oriented equities.
Bottomline
For jewellery buyers, GST 2.0 brings clarity with no change in tax incidence—purchases of gold and silver jewellery will continue to attract 3% GST plus 5% on making charges. For bullion investors, the unchanged rates mean price movements will remain tied to global trends, currency swings and central bank actions rather than domestic tax policy. Retailers, however, may see an indirect boost as lower taxes on essentials leave consumers with more discretionary spending power for ornaments.
While GST 2.0 has been billed as India’s biggest tax reset since 2017, its effect on bullion is neutral. For households, this ensures predictability during the festive season. For investors, it signals a short-term rotation into equities, even as gold and silver continue to hold their place as long-term safe-haven assets.
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
