The GST Council, led by Finance Minister Nirmala Sitharaman, has simplified the indirect tax regime in the country by adopting a three-slab structure — 5%, 18%, and 40%. All items will be covered under these GST slabs. GST on gold and silver jewellery will remain unchanged at 3%, with an additional 5% on making charges. Meanwhile, Gold coins and bars will continue to have 3% GST.

Hence, the GST 2.0 reforms will not have a direct impact on demand for bullions.Following the GST rate cut announcement, MCX Gold futures declined over 1% as GST reforms increased the risk appetites of investors to more risker assets.

Lowering the GST on jewellery boxes, from 12% to 5%, will reduce costs for retailers and exporters, while making packaging and gifting more affordable for consumers. GST on jewellery boxes reduced from 12% to 5%.GST  for Precious stones and semi-precious stones: from 3% to Nil–3%, for Diamond (industrial, uncut, cut and polished): from 3% to Nil–3%, for Goldsmith and silversmith wares (handicraft): from 12% to 5%.

The Indian jewellery sector has long advocated for a uniform 1% Goods and Services Tax (GST) on gold, silver, diamonds, and related products, citing the need for stability, affordability, and ease of compliance. However, the government has not accepted this demand, leaving industry stakeholders concerned about competitiveness and compliance costs.

Industry bodies and associations argue that a higher rate discourages consumers, fuels unorganised trade, and undermines India’s role as the global hub for jewellery manufacturing and exports.

Retailers further stress that lower taxation could expand formal sector participation and curb tax evasion. However, policymakers maintain that reducing GST below current levels may not be fiscally viable.

With the festive and wedding seasons around the corner, jewellers fear that the continuation of higher GST could dampen consumer sentiment and shift buying patterns towards the informal market.