GST on Silver 2026: Tax Rates, HSN Codes & Calculation

In India, the GST on silver is 3%, whether it is silver bars, coins or most ornaments. The GST rate on silver has not changed even after the GST Council’s rate revision in September 2025 (GST 2.0). While most other goods were grouped into the 5%/18%/40% slabs in GST 2.0, silver continued to be taxed at 3%.

In this guide, we have explained the entire GST rate table with HSN codes, step-by-step calculation examples for bars, coins and jewellery, the comparison of 3% rate to pre-GST tax structure and rules for Input Tax Credit for registered businesses.

Nearly every silver category — raw silver, bars, semi-manufactured forms, and general jewellery articles — is taxed at a flat 3%. The one notable exception introduced under GST 2.0 is silver filigree work (HSN 7113 11 10), a handcrafted category that now attracts a reduced 1.5% GST rate rather than the standard 3%.

For everything else, the tax splits differently depending on where the transaction happens. On an intra-state sale — buyer and seller in the same state — the 3% splits into CGST 1.5% and SGST 1.5% (or UTGST 1.5% in a Union Territory), with both components going to the central and state governments respectively. On an inter-state sale, a single IGST of 3% applies instead, collected centrally and apportioned between the states involved. Either way, the total tax on the buyer is 3 percent of the value of the silver.

The basic formula is simple:

GST Amount = Silver Value × 3%

When you buy a bar, coin or jewellery with making charges it’s a little different in practise. The three scenarios below assume a silver rate of roughly ₹235 per gram, in line with current market prices – always check the current rate before using these figures for an actual purchase, as silver prices fluctuate daily.

GST on Silver Bars and Bullion

Silver bars fall under HSN code 71069220 and attract a flat 3% GST on the bar's value, with no making charges involved.

1. Weight × price per gram = base value. For a 100-gram bar at ₹235/gram: 100 × 235 = ₹23,500.

2. Base value × 3% = GST. ₹23,500 × 0.03 = ₹705.

3. Total cost = base value + GST. ₹23,500 + ₹705 = ₹24,205.

This is the simplest calculation in silver taxation, since there are no making charges or design premiums to factor in — the entire cost is just weight, rate, and GST.

GST on Silver Coins

Silver coins attract the same 3% GST as bars, regardless of whether the coin is a legal-tender issue or an investment or collectible coin — current rules apply the rate uniformly based on the metal, not the coin's status.

For a plain 50-gram silver coin costing ₹235/gram: base value = 50 × 235 = ₹11,750. GST at 3% = ₹11,750 × 0.03 = ₹352.50. Total cost = ₹11,750 + ₹352.50 = ₹12,102.50. As with bars, plain investment coins usually don't attract making charges, so this is close to the final price you would see on a jeweller's or bank's invoice, before any premium the seller may add.

GST on Silver Ornaments and Making Charges

Silver jewellery is classified under HSN code 7113 and taxed differently depending on how the jeweller bills making charges – as a single composite price or as a separate line item.

Scenario A — Combined invoice

If the silver value and making charges are billed as a single amount, the entire total is taxed at 3%. For Silver @ ₹20,000 + making charges ₹3,000 billed together Base amount = ₹23,000 GST @ 3% = ₹690 Total = ₹23,690

Scenario B — Separate invoice

If making charges appear as a distinct line item, they attract 5% GST instead of 3%. Using the same numbers: GST on silver value = ₹20,000 × 3% = ₹600; GST on making charges = ₹3,000 × 5% = ₹150; combined GST = ₹750; total = ₹20,000 + ₹3,000 + ₹750 = ₹23,750.

The separate-invoice route costs ₹60 more in this example, purely because making charges are taxed at the higher 5% rate rather than 3%. Asking for an itemised bill lets you see exactly which billing method your jeweller has used.

Quick-reference formula box:

• Silver value (bar/coin/plain jewellery): GST = Value × 3%

• Making charges (billed separately): GST = Making Charges × 5%

• Silver filigree work (HSN 7113 11 10): GST = Value × 1.5%

Before GST was introduced in July 2017, silver purchases attracted a patchwork of taxes: roughly 1% excise duty plus a state-level VAT that typically ran around 1%, though the exact VAT rate varied from state to state. This meant the effective tax on silver was close to 2% in most states, but buyers in different parts of the country could end up paying noticeably different amounts for the same purchase.

For 100 grams of silver at ₹235/gram (base value ₹23,500): under the old ~2% structure, tax came to roughly ₹470, for a total of ₹23,970. Under the current 3% GST, tax comes to ₹705, for a total of ₹24,205 — a difference of about ₹235, or roughly 1% more than before.

The headline rate did rise, but this comparison only tells part of the story. The pre-GST system involved cascading taxes at multiple stages of the supply chain and inconsistent state-level VAT rates, both of which added hidden costs and price variation that rarely showed up as a clean, single number on a receipt. The post-GST 3% rate, while nominally higher, is transparent, uniform across every state, and shown as a single line item — which is why many buyers find it easier to verify they are being charged correctly today than they could before 2017.

Also Read: Capital Gains Tax on Silver in India

Input Tax Credit (ITC) lets a GST-registered business offset the GST it pays on purchases against the GST it collects on sales — but this benefit is available only to businesses, not individual consumers.

Who can claim ITC:

• Jewellers, bullion traders, and manufacturers registered under GST, who purchase silver for use in a taxable supply (such as manufacturing jewellery for resale).
• The business needs a valid tax invoice from the supplier showing the GST you have paid.
• The purchase should be matched with GSTR-2B, the auto populated statement showing that the supplier has correctly reported and paid GST due.

Who cannot claim ITC:

• Individual consumers buying silver for personal use, gifting, or investment have no mechanism to claim back the GST paid — the 3% is a final cost to them.
• However, ITC on silver used for personal consumption, given away or used in the production of exempt supplies cannot be claimed by businesses otherwise registered under GST.

In practice this means a jeweller who buys raw silver and turns it into ornaments to sell on can claim back the GST they paid on the raw silver as a credit against their output tax liability. A customer who buys the finished piece cannot claim back any of the 3% GST they pay on it. This distinction is worth understanding if you are evaluating silver as a business input versus a personal purchase or gift.

For business buyers specifically, it also matters where in the supply chain the purchase happens. A trader buying bulk silver bars to resell to jewellers can claim ITC on that purchase, then charge GST on the onward sale, effectively passing the tax through the chain until it reaches the final consumer, who bears the full cost with no credit available. Individual buyers, by contrast, should treat the 3% GST — and any 5% on separately billed making charges — as a straightforward addition to the purchase price, with no route to recover any part of it later.

A proper invoice makes it far easier to check whether you are being charged correctly, and a few line items are worth specifically looking for.

The invoice should separately state the silver's weight and purity, the rate per gram applied, and the resulting base value before tax. It should show the HSN code used for the item — 7106 for bars, 7113 or 7114 for jewellery — and the GST breakdown, either as CGST plus SGST or as IGST, along with the applicable rate. If making charges apply, check whether they appear as a separate line item taxed at 5%, or are folded into the silver value and taxed at 3% along with everything else, since this materially affects your final cost. A GST-registered seller's GSTIN should also appear on the invoice, which matters if you are a business planning to claim ITC.

Scrap silver

Silver scrap falls under HSN code 7112 and attracts the standard 3% GST. When an unregistered individual sells scrap silver to a GST-registered dealer, the reverse charge mechanism applies — meaning the registered buyer, not the unregistered seller, becomes liable to pay the GST directly to the government.

Second-hand silver jewellery

When a registered dealer resells second-hand silver jewellery, GST can be charged either on the full resale value, or under the margin scheme, which taxes only the difference between the dealer's purchase price and resale price. The margin scheme is optional and generally benefits dealers buying used jewellery at a discount and reselling it at a modest markup. Individuals selling silver privately to another individual, rather than through a registered dealer, do not need to charge GST on that sale at all.

Imported silver

Imported silver bullion attracts a 6% customs duty (comprising 5% Basic Customs Duty plus 1% Agriculture Infrastructure and Development Cess), in addition to 3% IGST charged at the point of import. This combined cost is meaningfully higher than buying silver domestically, so it is worth factoring both charges into any comparison between imported and domestic silver. Note that import restrictions and duty rates on precious metals are periodically revised by the government, so it is worth checking the current customs notification before finalising a large import.

Digital Silver and its advantages

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Also Read: GST on Gold in India