Gold Jewellery Tax Calculation: How Much You Pay on 18K and 22K Ornaments with Making Charges

The rising cost of gold is not just increasing the price of ornaments but also adding to the tax burden on buyers. When you purchase jewellery in India, taxes such as GST and levies on making charges significantly affect the final bill. If you are planning to buy 18K or 22K gold jewellery, here’s a detailed breakdown of how much tax you actually need to pay and how making charges impact the calculation.

Gold Prices Witness Sharp Increase

According to the Indian Bullion and Jewellers Association (IBJA), gold prices surged sharply on September 9, 2025. In just one day, 24-carat gold became costlier by ₹1,884 per 10 grams, while 22-carat gold rose by ₹1,667 and 18-carat gold by ₹1,373.

• On September 8, the price of 24K gold stood at ₹1,06,882 per 10 grams, which increased to ₹1,08,706 the next day.

• Similarly, 22K gold jumped from ₹98,298 to ₹99,975, and 18K gold climbed from ₹80,484 to ₹81,857 per 10 grams.

With this surge, the tax payable on jewellery has also changed. Let’s understand how much you will be charged if you get 10 grams of gold jewellery crafted.

GST and Making Charges on Jewellery

While buying gold ornaments, customers pay two types of taxes:

1. 3% GST on gold value

2. 5% GST on making charges

Making charges are usually calculated at around 10% of the gold price, though they may vary from jeweller to jeweller.

Tax on 22K and 18K Jewellery

Let’s take an example based on the latest prices for 10 grams of gold jewellery.

• 22K Jewellery

  • Gold price: ₹99,975

  • Making charges (10%): ₹9,997

  • GST on gold (3%): ₹2,999

  • GST on making charges (5%): ₹500

  • Total tax = ₹3,499

• 18K Jewellery

  • Gold price: ₹81,857

  • Making charges (10%): ₹8,185

  • GST on gold (3%): ₹2,455.71

  • GST on making charges (5%): ₹409.25

  • Total tax = ₹2,864.96

So, if a customer buys 10 grams each of 22K and 18K jewellery, the combined tax would amount to approximately ₹6,364.06.

Why Taxes Keep Changing

Experts point out that the tax amount on jewellery is never constant. Since gold prices fluctuate daily, the payable GST automatically varies. Moreover, different jewellers may charge different making charges, which directly influences the final tax calculation.

• Higher making charges = Higher tax and total cost

• Lower making charges = Slightly cheaper jewellery

Important Rules for Buyers

When buying gold, customers must also be mindful of compliance requirements:

• If you purchase gold worth more than ₹2 lakh in cash in a financial year, providing your PAN card is mandatory.

• Transactions above ₹10 lakh are reported to the Income Tax Department.

This ensures transparency in high-value gold purchases.

Will GST 2.0 Impact Gold Prices?

Recent reforms in the GST framework, effective from September 22, will make several consumer goods cheaper. However, there is no change in the GST rate applicable to bullion and jewellery.

• Gold, silver jewellery – 3% GST continues

• Making charges – 5% GST remains unchanged

• Gold coins and biscuits – taxed at 3% GST

This means that GST 2.0 reforms will not directly impact the demand for bullion in India.

Final Word

Buying gold jewellery in India involves more than just paying the market rate. Customers need to factor in GST on gold, additional GST on making charges, and compliance rules for large transactions. With gold prices hitting new highs, the tax outgo on ornaments is also climbing steadily.

If you are planning to invest in 18K or 22K jewellery, it is always wise to check the latest gold rates, compare making charges among jewellers, and calculate the tax component beforehand. This will help you make an informed decision and avoid surprises in your final bill.