Jewellery trade body All India Gem & Jewellery Domestic Council (GJC) has urged the government to rationalise the Goods and Services Tax (GST) on bullion and precious ornaments, reducing it to 1.25 per cent from the current 3 per cent to ease the burden on consumers and boost sales.
When GST was first introduced in July 2017, 24-carat gold hovered around ₹28,439 per 10 grams. Based on this price level, the GST Council set the GST incidence rate on bullion and precious ornaments at 3 per cent , despite the earlier indirect tax structure being effectively 1 per cent and with excise Duty implementation in 2016, with applicability on only those jewellers having turnover of 10 crores and above, giving ease to almost 80 to 85 per cent of the industry as they did not fall under the purview of Excise Duty. Hence, under this pretext, GJC believes the effective rate of GST should be 1.25 per cent .
As of February 6, 2025, the price of 24-carat gold stands at ₹86,510 per 10 grams, marking a 204 per cent increase over the past 7.5 years. Despite this significant spike, the GST rate has remained static at 3 per cent , effectively increasing the tax burden on both consumers and jewellers. Consequently, there is an urgent need to reduce the GST rate to 1.25 per cent , aligning taxation with industry realities, encouraging compliance, and achieving revenue neutrality.
A core principle of GST determination was revenue neutrality—ensuring that taxation levels remain equivalent to pre-GST rates. Based on the past indirect tax structure, the revenue-neutral rate for the gems and jewellery industry should be 1.25 per cent , not the current 3 per cent .
India is a global leader in jewellery craftsmanship and manufacturing. To support the ‘Make in India’ initiative, it is essential to establish a competitive taxation framework that fosters local production rather than driving demand toward unofficial or imported channels. Lowering the GST to 1.25 per cent would encourage domestic manufacturers, boost job creation, and position India as a global hub for jewellery making, aligning with the Honourable Prime Minister Narendra Modi’s vision of ‘Make in India’.
Rajesh Rokde, chairman of the All India Gem & Jewellery Domestic Council, said, “The Gems & Jewellery Industry (GJI) is a significant contributor to India’s economy, playing a crucial role in employment generation, exports, and overall economic growth. However, the sector has been burdened with high taxation rates, negatively impacting businesses and encouraging unregulated trade. We request the Hon’ble GST Council and concerned authorities to reconsider and rationalize the GST rate to 1.25 per cent , ensuring sustainable growth for the industry while maintaining a robust tax base.”
Avinash Gupta, Vice Chairman of the All India Gem & Jewellery Domestic Council, added, “Before GST, Central Excise Duty was levied at only 1 per cent , along with a 1 per cent Value Added Tax (VAT) imposed by most states, similarly based on Revenue Equivalence Ratio, and also considering the increase in Gold rates, the GST should be 1.25 per cent for the Gems & Jewellery Industry. Hence, the industry urges the government to honour the revenue neutrality principle and revise the GST rate to 1.25 per cent , ensuring fairness and sustainability.”
