GST & Import Duty on Gold in India — 2026 Guide

From London to Your Local Jeweller

Gold imported into India passes through the following stages, each adding cost:

1. International spot price (USD per troy ounce) on the LBMA in London
2. Convert to INR per gram at the day's USD/INR exchange rate
3. Add Indian import duty stack (BCD + AIDC) on the CIF value
4. Add 3% GST on the imported value at customs clearance
5. Distribute to wholesalers; add MCX/IBJA association reference rate
6. Retail jeweller adds making charges, wastage, and 3% GST again at billing

The cumulative effect is significant. A drop in international gold price doesn't pass through 1:1 to retail because each tax layer is a percentage. A 1% drop in international gold typically translates to about 0.7–0.8% drop at the Indian retail level.

The Indian Import Duty Stack on Gold

Import duty rates have been adjusted multiple times over the past five years — the 2024 Union Budget cut total duty from 15% to 6% briefly, before being restored. Watch the annual Union Budget for changes; rate cuts are the single biggest driver of short-term retail price drops.

Refined gold bars and dore (semi-refined) gold have slightly different duty stacks. The figures above apply to refined gold imports, which form the bulk of India's gold inflows.

GST on Gold at the Retail Stage

Once gold reaches the retail jeweller, two GST charges apply when you buy jewellery:

These GST rates have been stable since 2017. The 3% on gold is split between Centre (1.5%) and State (1.5%) — but you only pay the combined 3% as a consumer.

Worked Example — Full Tax Stack

Suppose international gold is $2,400 per troy ounce, USD/INR is 84, and the jeweller's making charges are 12% on a 10g 22K chain.

In this example, of the final ₹81,244 paid, roughly ₹3,725 is import duty + customs IGST (already embedded), and ₹2,530 is retail GST. Total tax: about ₹6,255 or 7.7% of the bill — and that's on top of the 15%+3% already loaded into the wholesale rate.

When Buying Coins, Bars, or Digital Gold

For pure gold products without jewellery making charges:

• Gold coins / bars: 3% GST on the gold value, plus a small premium (1–3%) over the spot rate from RBI-authorised refiners (MMTC-PAMP, Augmont).
• Sovereign Gold Bonds: No GST (since you're buying a Government of India debt instrument backed by gold, not physical gold). 2.5% annual interest paid by RBI is taxable as "income from other sources."
• Digital gold (MMTC-PAMP, SafeGold via PhonePe / Google Pay): 3% GST on the buy value. Resale to the platform is not subject to additional GST but selling jewellery is.
• Gold ETFs: No GST on the buy. Capital gains rules apply on redemption (LTCG over 24 months at 12.5% without indexation).

For pure investment exposure, SGB and ETFs are tax-efficient. For physical ownership, coins/bars carry 3% GST but no making charges, making them about 8–12% cheaper than equivalent jewellery.

Tax When You Sell Gold

Selling gold (physical, digital, ETF, SGB) triggers capital gains tax on any profit:

• Short-term (held under 24 months for physical/digital, 12 months for ETFs): taxed at your slab rate.
• Long-term (over 24 months): taxed at 12.5% (post-July 2024 rules, without indexation).
• SGB held to maturity (8 years): capital gains are fully exempt — making SGB the most tax-efficient way to hold gold long-term.

Always retain the original purchase invoice. Without it, the entire sale value can be treated as capital gain, which dramatically increases your tax. Digital gold and SGB platforms maintain electronic records — physical gold buyers must safeguard the paper invoice for years.