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Knews Desk- Gold purchases increase rapidly during weddings and festival seasons, but many customers get shocked when they see the jewelery bill. The main reason for this is the two types of GST visible in the bill. Often people consider it as double tax, whereas in reality it is not so.

In India, gold is not just a means of investment but is deeply linked to tradition, culture and emotions. Therefore, the demand for gold jewelery increases significantly during weddings, festivals or any special occasion. In such a situation, it becomes very important to understand the tax structure so that there is no confusion at the time of purchase.

3% GST on gold price

When a customer buys gold, be it jewellery, coin or biscuits, 3% GST is charged on its original price. For example, if the price of gold is Rs 1 lakh, then Rs 3,000 GST will be added on it. This tax is applied directly on the value of gold and is uniform across the country.

5% GST on making charges

The process of making jewelery includes the cost of labour, designing and other services of the artisan, which is called making charge. A separate 5% GST is imposed on this. For example, if the making charge of a piece of jewelery is Rs 20,000, then Rs 1,000 additional GST will have to be paid on it. This is why two separate taxes appear in the bill.

Is this double tax?

According to experts, this cannot be called double tax. The first tax is levied on the commodity i.e. gold, while the second tax is levied on the service i.e. the process of making jewellery. Therefore both fall in different categories and their purpose is also different.

old gold exchange

If a customer gets new jewelery made by giving old gold, then he has to pay only the making charge and GST on it. But if new gold is purchased by selling old gold, then 3% GST is again applicable on the entire price.

Caution while shopping

While buying gold, it is always important to get a detailed bill, which clearly shows the price of gold, making charges and GST separately. Apart from this, it is also important to check BIS hallmark, which ensures the purity of gold. Buying gold with correct information is not only financially beneficial, but also protects from any kind of trouble in future.