What buyers should know about GST rates on gold jewellery?

Gold jewellery has always held a special place in Indian culture, symbolising wealth, prosperity, and tradition. However, when purchasing gold jewellery, it’s essential to understand the costs involved, including the Goods and Services Tax GST on gold jewellery. In this blog, we will explore the GST rates on gold jewellery, how it impacts the overall cost, and some helpful tips for buyers. We’ll also touch upon using an EMI calculator for a gold loan if you are considering financing your purchase.

Understanding GST on gold jewellery

GST is an indirect tax levied on the supply of goods and services in India. Introduced on 1st July 2017, GST aims to streamline the tax structure, replacing multiple indirect taxes with a single unified tax. When GST on gold jewellery is applied at various stages of the value chain, from raw gold to the finished product.

GST rates on gold jewellery

The GST rate on gold jewellery is structured as follows:

  • Raw gold: 3% GST is levied on the value of raw gold.
  • Making charges: An additional 5% GST is levied on the making charges associated with crafting the jewellery.

To illustrate, if you buy gold jewellery worth ₹1,00,000 with making charges of ₹10,000, here’s how the GST is calculated:

  • GST on gold value: 3% of ₹1,00,000 = ₹3,000
  • GST on making charges: 5% of ₹10,000 = ₹500

Therefore, the total GST payable would be ₹3,500, making the overall cost of the jewellery ₹1,13,500 (₹1,00,000 + ₹10,000 + ₹3,500).

Impact of GST on gold jewellery prices

The introduction of GST has standardised the tax rates on gold jewellery, bringing more transparency to the pricing. However, it has also led to a slight increase in the overall cost of gold jewellery compared to the pre-GST era. Buyers now need to consider the GST component when budgeting for their purchases.

Tips for buying gold jewellery

Here are some useful tips to keep in mind when buying gold jewellery:

  • Check the hallmark: Ensure that the gold jewellery you purchase is hallmarked. The Bureau of Indian Standards (BIS) hallmark certifies the purity of gold, providing assurance of quality.
  • Compare prices: Visit multiple jewellers to compare prices, including the making charges and GST. This can help you find the best deal.
  • Negotiate making charges: Making charges can vary significantly between jewellers. Don’t hesitate to negotiate to get a better rate.
  • Understand the bill: Ensure that the bill provided by the jeweller clearly breaks down the cost of gold, making charges, and GST. This transparency helps you understand the components of the total price.
  • Stay updated: Gold prices fluctuate regularly based on market conditions. Keep an eye on current rates to make an informed purchase.

Financing your gold jewellery purchase

If you’re planning to buy gold jewellery but prefer to spread the cost over time, you might consider taking a gold loan. A gold loan allows you to pledge your existing gold assets in exchange for funds, which can then be used to buy new jewellery. The loan amount is typically a percentage of the gold’s value, and you repay it in installments.

Using an EMI calculator for gold loans

An EMI calculator for gold loans is a handy tool that helps you estimate your monthly repayments based on the loan amount, interest rate, and tenure. Here’s how you can use it:

  • Enter the loan amount: Input the amount you wish to borrow, which is usually a percentage of the gold’s value.
  • Enter the interest rate: Provide the interest rate offered by the lender. Interest rates on gold loans can vary, so it’s important to compare rates from different lenders.
  • Enter the loan tenure: Specify the repayment period. Gold loan tenures can range from a few months to a few years, depending on your financial situation and the lender’s policies.
  • Calculate EMI: The calculator will generate the estimated EMI, helping you plan your monthly budget and manage your finances better.

You can check the EMI calculator on the Bajaj Finserv App also. 

Benefits of using an EMI calculator for gold loans

  • Financial planning: Knowing your EMI in advance helps you plan your finances and ensures you can comfortably manage your monthly repayments.
  • Comparison: By adjusting the loan amount, interest rate, and tenure, you can compare different loan options and choose the one that best suits your needs.
  • Transparency: An EMI calculator provides a clear breakdown of your repayment schedule, including the principal and interest components.

Understanding the GST rates on gold jewellery is crucial for making informed purchasing decisions. While GST has added to the overall cost of gold jewellery, it has also brought transparency and standardisation to the market. By being aware of the GST rates and using tools like an EMI calculator for gold loan, buyers can plan their purchases more effectively.

Whether you’re buying gold jewellery for a special occasion or as an investment, keeping these tips in mind will help you navigate the process smoothly. Remember to compare prices, negotiate making charges, and ensure transparency in billing. If opting for a gold loan, use an EMI calculator to manage your finances and make informed decisions. With careful planning and awareness, you can enjoy the timeless beauty of gold jewellery while ensuring it fits within your budget.

Leave a Reply

Your email address will not be published. Required fields are marked *