GST on Silver in India

Working out the GST on silver

A silver bill has two taxable parts that are charged at different rates, so the final GST is not a single flat percentage of the total.

• The silver value attracts 3% GST.
• The making charges attract 5% GST, billed separately.
• For intra-state sales each rate splits into equal CGST and SGST halves. Inter-state sales use a single IGST at the same rate.

A worked example

Take a silver purchase where the base value is ₹50,000 and the making charges are ₹5,000. Here is how the bill builds up.

GST on silver by form

Silver works exactly like gold under GST: a special 3% rate on the metal value, with 5% on making charges if they are billed separately. This structure was left unchanged by the September 2025 GST 2.0 reforms. The table covers the common silver formats.

Billing changes your silver tax

The way a jeweller bills makes a real difference. If the silver value and making charges are shown as separate lines, you pay 3% on the metal and 5% on the making. If the whole ornament is billed at one consolidated price, GST is generally charged at a flat 3% on the total. On a piece with 50,000 of silver and 5,000 of making charges billed separately, that is 1,500 plus 250, so 1,750 in GST. Always ask for an itemised invoice so you can see how the rate is applied.

Investment silver, imports and resale

Bars, coins and ETFs

Physical silver bars and coins attract 3% GST. Silver ETFs are not charged GST at purchase since they are securities, though capital gains tax applies on redemption.

Imported silver and old silver

Imported silver attracts 3% IGST plus a 6% customs duty. When an individual sells personal silver privately there is no GST, but a registered dealer reselling silver must charge it.

Input tax credit

Registered jewellers and traders can claim ITC on silver bought for manufacturing or resale. A personal investment purchase does not qualify.

Industrial and non-jewellery silver

Silver is not only a jewellery metal. Silver used in electronics, solar panels and industrial applications is taxed at the same 3% on value under HSN 7106, and a manufacturer using it as an input can claim full input tax credit against their output liability. Silver utensils, common as gifts in India, also attract 3%. Silver scrap is 3% and, when supplied by an unregistered person to a registered buyer, can fall under reverse charge.

Reading a silver invoice

Ask for the metal value and the making charges as separate lines with their HSN codes. If a jeweller bills a single consolidated amount, GST is generally charged at a flat 3% on the whole thing, which can actually work in your favour on a piece with high making charges but leaves you unable to verify the breakup. Purity and hallmarking do not change the rate. You will see silver filigree and handmade imitation jewellery quoted at “1.5%” on many rate tables. That figure is the CGST half only. The whole of Chapter 71 sits in Schedule V of Notification 1/2017-Central Tax (Rate), which is 1.5% CGST plus 1.5% SGST, so the rate you actually pay is 3% — the same as any other silver article. Tables that publish the CGST column on its own are the usual source of this confusion.

Compliance for silver traders

Registered jewellers and bullion dealers file GSTR-1 and GSTR-3B in the normal way and can claim ITC on raw silver and on job-work charges. Job work sent to an unregistered karigar is accounted for by the jeweller under reverse charge and claimed back as credit. E-invoicing applies once turnover crosses the prescribed threshold. Getting HSN 7106 and 7113 right on each line matters, because the codes distinguish raw metal from finished articles and mismatches show up in reconciliation.

Frequently asked questions