Ask ten customers what GST they pay on jewellery and you will hear three different answers — 3%, 3% plus 5%, or nothing at all on an exchange. Much of what is written online is aimed at buyers and gets the counter-side details wrong. This is the jeweller's version: what goes on the bill, at what rate, and why.
Ready ornaments: 3% on the whole value
When a shop sells a finished piece — a chain off the tray, a bangle from stock — it is selling goods. GST is 3% on the full transaction value: metal, wastage (VA), making charge and stones together. Printing the making charge as a separate line on the bill does not turn it into a 5% service. The CBIC's FAQ on the gems and jewellery sector says exactly this, and the Gem & Jewellery Council's FAQ repeats it.
On an intra-state sale that 3% prints as 1.5% CGST and 1.5% SGST; on an inter-state sale, 3% IGST.
When 5% does apply
- Job work — a karigar's labour charge to the shop for making ornaments from the shop's gold is a service, taxed at 5%.
- Labour-only repairs — if you only charge the customer for labour, that labour is billed at 5%.
- Custom work where gold and labour are supplied as two clearly separate things, each priced and billed on its own.
Where a repair also uses extra gold, the GJC FAQ suggests billing the added gold separately at 3% and the labour at 5%. A single lump-sum repair bill with no break-up risks being treated as one mixed supply at the higher rate.
Old gold exchange: GST on the new piece
This is the one most often got wrong. When a customer brings old gold and takes a new ornament, the old gold is payment in kind. According to the CBIC/GJC FAQ, GST is charged on the value of the new jewellery — not just on the cash the customer adds. Their worked example: old jewellery worth ₹10,000 plus ₹5,000 cash for a new piece priced at ₹15,000 attracts GST on ₹15,000.
| Line on the bill | Amount |
|---|---|
| New ornament (metal + VA + making) | ₹15,000 |
| GST 3% on ₹15,000 | ₹450 |
| Bill amount | ₹15,450 |
| Less: old gold received | − ₹10,000 |
| Customer pays | ₹5,450 |
Many consumer websites say an exchange carries no GST on the old gold's value. Some advance rulings have taken different views on specific facts, so if your volumes of exchange are large, settle the method with your CA once and apply it consistently on every bill.
What to print on the bill
- Your GSTIN, the customer's GSTIN if they have one, and the place of supply.
- HSN 7113 for gold and silver jewellery.
- Purity, gross weight, stone weight and net weight per line, plus the HUID for hallmarked gold.
- Rate per gram, VA, making and stone value — so the customer can see how the price was reached.
- Taxable value, CGST/SGST or IGST, and the old gold deduction as a separate line below the tax.
How Auromine handles it
Auromine MPOS Jewelry Software prices each tagged item from the day's rate, adds its own VA and making, applies 3% on the full value, splits CGST/SGST or IGST by place of supply, and takes old gold in exchange as a separate line after tax. It prints HSN and HUID on the bill. The Pearl is free forever for one counter — 30 bills a month and 200 items, no tag printing; paid plans start at ₹2,999 a year.
Checked November 2026. This is a practical guide, not tax advice — confirm your billing method with your chartered accountant.