Chapter 71 - Complete Guide to GST Rates and HSN Codes for Silver

If you're trying to figure out where silver fits into the GST system. HSN code 7106 covers silver itself; silver plated with gold or platinum, raw (unwrought) silver, semi-manufactured silver, and silver powder. All of it sits at a flat 3% GST. But if silver is turned into a piece of jewellery, a coin, or scrap metal – the code shifts, even if the tax rate often doesn't. Finished jewellery moves to HSN 7113, coins go to HSN 7118, and scrap falls under HSN 7112.

Before we get into the codes themselves, it helps to understand what HSN actually means. HSN stands for the Harmonised System of Nomenclature, and it's a worldwide numbering system that customs and tax departments use to identify exactly what a product is.

Silver is a precious commodity that is used in many ways. Knowing the HSN codes and GST rates is important.

By visiting the GST portal, you can get the complete list of HSN codes.

The applicable GST rate on silver is 3% in every form and on all types of articles.

The GST rate is added to the price of silver to find the final price that you pay when you buy the metal.

The Goods and Services Tax (GST) has removed the cascading effect of taxes on all goods and services, including silver. In the old indirect tax regime, taxes on silver were charged at multiple levels, which included excise duty, VAT (value-added tax), etc. Moreover, rates were applied at the discretion of the state. Due to this, a lot of inconsistency was created, and the price of silver varied across states. After the implementation of GST in India, a standardised GST rate of 3% was implemented throughout India. This made it easier to buy and sell silver.

HSN 7106 is reserved specifically for silver that hasn't yet been turned into a finished product. That includes unwrought silver, meaning raw, unprocessed metal straight from refining, and semi-manufactured forms like sheets, plates, strips, tubes, pipes, and wire.

The table below specifies the HSN (Harmonised System of Nomenclature) codes for classifying different goods made of silver:

If your business turnover is under ₹5 crore, a 4-digit code like 7106 is usually fine on your GST invoices. Cross ₹5 crore, and you're expected to use the full 8-digit code, such as 71069220 for silver bars, so the description on your invoice matches exactly what you're selling.

If you want to find the HSN code of a particular item of silver, you can do so online through the GST portal. Here are the steps:

Step 1: Visit the GST portal

Step 2: Click the 'Services' tab on the dashboard.

Step 3: Select 'User Services'

Step 4: You will reach the HSN search page.

Step 5: Download the HSN directory in Excel format.

Step 6: Search the HSN code by (i) the HSN chapter code or (ii) the description.

Step 7: Search by HSN code (use your Excel sheet) and enter the appropriate captcha, then search.

Step 8: The results would appear under the chapter head, showing the product description, HSN code, technical description, trade description and other related HSN codes.

Step 9: When searching the HSN chapter by description, select the goods or services tab, enter the description of goods or services, enter the appropriate captcha, and search.

Step 10: Search results would appear under the chapter head, showing product description, HSN code, technical description, trade description and other related HSN codes.

Also Read: Goods and services tax (GST)

Each silver product carries its classification, and getting it wrong on an invoice can trigger a mismatch notice from the department later. The table below puts every classification in one place:

Treat 7106 as the code for raw material and 7113/7118/7112 as the codes for what that raw material eventually becomes: jewellery, coins, or waste.

Finished silver ornaments – rings, necklaces, bangles, earrings, anything you'd actually wear – fall under HSN 7113 (articles of jewellery and parts thereof of precious metal), which are taxed at 3% GST on the value of the piece.

This classification is different from HSN 7106, which only applies to the raw silver metal used as a manufacturing input before it's been worked into something wearable. So a jeweller buying raw silver bars to melt down would invoice those under 7106, but the finished rings they sell to customers go out under 7113.

Silver coins, whether they're commemorative pieces or investment-grade bullion coins, are classified under HSN 7118 (coin), attracting the same 3% GST. This is a separate code from silver bars, which fall under HSN 7106 even though both are often bought from the same bullion dealer for the same investment purpose.

Silver bars and bullion in unwrought form are classified under HSN 71069220 (bar) within the 7106 parent code, at 3% GST. Whether you're buying from a jeweller, a bank, or an authorised bullion dealer, the classification stays the same.

To find the applicable GST on silver, you will have to first find the cost of silver. This is done by the following formula: silver price = price per gram x volume (grams) x purity of silver. Once you have the silver's price, you can find the GST payable. The GST payable, which is 3% of the silver's price, is calculated based on the GST rate. GST on silver = 3/100 x the price of silver. Add together the total silver price and the applicable GST, and you will get the actual amount payable for your purchase.

Worked example (June 2026 prices): The silver rate on 23rd June 2026 stood at approximately ₹245 per gram. Say a trader buys 100 grams of a silver bar at that rate:

• Silver value: 100g x ₹245 = ₹24,500
• GST at 3%: ₹24,500 x 3% = ₹735
• Total payable: ₹24,500 + ₹735 = ₹25,235

Now, let’s consider a smaller, more everyday example: someone walking into a shop to buy finished silver jewellery worth ₹50,000 before any making charges are added.

• Jewellery value: ₹50,000
• GST at 3% on metal value: ₹1,500
• Subtotal: ₹51,500

Making charges are levied on different types of silver products. GST is also applicable to the making charges, as they are a form of service. The GST rate on making silver jewellery is 5%. So, if you buy silver jewellery or other items, you must add the making charges and GST on those charges to get the total price.

Continuing the ₹50,000 jewellery example: if the jeweller charges making charges separately at, say, ₹5,000, GST on that service portion is levied at 5% under SAC 9988, adding ₹250. The final bill becomes ₹51,500 + ₹5,000 + ₹250 = ₹56,750.

If the making charge is bundled into the jewellery price instead of being billed separately, the entire combined amount is taxed at the flat 3% rate, which usually works out a little cheaper for the buyer.

• ITC eligibility: GST-registered businesses can claim input tax credit on silver purchased for business use, subject to standard ITC rules under the CGST Act, 2017. This applies whether you're buying raw bars to manufacture jewellery or sourcing finished pieces for resale.
• E-way bill: An e-way bill is required for the interstate movement of silver goods above ₹50,000 in value, as per CBIC e-way bill rules..
• Invoice requirements: GST invoices for silver must carry the correct HSN code (7106, 7113, 7118, or 7112 as applicable), description, quantity in grams/kilograms, rate, and GST amount. Businesses with turnover above ₹5 crore must use the 8-digit HSN code; up to ₹5 crore, a 4-digit code is acceptable (Source: cbic-gst.gov.in).

A small but practical habit: cross-check the HSN code on every purchase invoice you receive from suppliers, not just the ones you issue. A wrong code on an inward invoice can still create a mismatch when your GSTR-2B is reconciled against your supplier's filing.

In India, silver is considered a precious metal and is often used for gifting, asset creation and also for investments. Knowledge of the HSN code of silver and its related products helps in the differentiation and proper filing of GST returns. So, if you sell silver, it is better to know the applicable HSN codes for the items you sell. For buyers, knowledge of the GST rates on silver and its making charges would help in informed purchases. The GST portal helps you find the HSN codes easily if you don't know them. You can also file your GST returns online for ease and convenience. To know your GST liability, use the online GST calculator to find out what you owe, which makes return filing easier.

Also Read: Find out the impact of GST on service providers

If you are buying silver in any form or if you are a business dealing in silver, it is important to know the HSN code for the different forms of silver and the applicable GST. While the HSN codes would help you file your GSTR correctly, the correct GST rates would help you understand the price you are paying when buying silver. So, use this guide when buying or selling silver.