Gold Price: Calculate How Much GST, Tax Rates You Pay For 24K, 22K, 18K Yellow Metal In India

After crossing a record high of Rs 75,160 in 10 grams, gold prices have corrected and are currently floating between Rs 71,000 to Rs 72,000 across 22K, 24K, and 18K. Gold is still more expensive than it was a year ago. However, did you know that the final price of yellow metal is packed with a host of tax rates and mostly GST?

Gold which was below Rs 61,000 a year ago, has now surged by nearly 23% as of now in 24K of 10 grams.

Three types of tax rates are levied on gold. Firstly is the GST rate on import of gold which attracts a custom duty of 15%. The duty of 15% comprises of 10% + 5% AIDC (agriculture infrastructure and development cess). Apart from this, there are a host of Social Welfare Cess and GST which is likely to be levied on gold.

Secondly, the GST rate on making charges of jewellery is about 5% including SGST of 2.5% + CGST of 2.5%. The GST rate earlier was of 18%, hence, a sharp correction has been made in the rate.

Then there is the GST rate on physical gold which comes to around a 3% GST (1.5% CGST + 1.5% SGST) rate. This replaced the earlier 1% VAT and 1$ service tax which was usually imposed in the pre-GST era.

Apart from this there are making charges on gold as well which can vary from 6% to 14% or more, depending upon the weight of the yellow metal.

How To Calculate GST, and Other Rates on Gold:

EXAMPLE: Let's say the base price of the imported gold is about Rs 60,000 in 10 grams. These are the tax rates that will be added to the final price:

1. Base Price: Rs 60,000

2. Add 15% Custom Duty: Rs 9,000 (Rs 60,000 X 5%).

3. Add GST Of 3%: Rs 2,070 (Rs 69,000 X 3%).

4. Let's Say Making Charges Is Of 10% On Gram Gold: Rs 7,107 (Rs 71,070 X 5%)

5. Lastly add GST on making charges which is 5%: Rs 355.35 (Rs 7,107 X 5%)

6. Total Price Of Gold: Rs 78,532.35 ( 1 + 2 + 3 + 4 + 5)

As per the World Gold Council, gold is a highly liquid yet scarce asset, which is no one's liability. Some of the fundamental roles for investing in gold are -- a diversifier that can mitigate losses in times of market stress; a source of long-term returns; a liquid asset with no credit risk that has outperformed fiat currencies; and a means to enhance overall portfolio performance.

WGC also stated that there are many ways to invest in gold. Investors should consider the options available in their market, and the form of investment that is appropriate to their circumstances.

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on the stock mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.