GST on gold jewelry in India is currently set at 3%, which can be a significant amount when purchasing expensive items. The making charges on gold jewelry are subject to an additional 5% GST. This applies to the labor or craftsmanship involved in creating the jewelry.

Businesses dealing in gold can claim Input Tax Credit (ITC) on the GST paid on their purchases. This means that a jeweler can offset the GST paid on gold bullion and making charges against the GST collected from customers when selling gold jewelry.

In addition to GST, gold imports are subject to customs duty. Currently, the customs duty on gold is 10%. There’s also an additional 5% Agriculture Infrastructure and Development Cess (AIDC) on imported gold, making the effective import duty 15%.

As per a recent survey by Local Circles, approximately 14 percent of those who purchased gold jewelry in the last 12 months did not take a GST receipt for their purchase.

Despite the clear benefits of always taking a GST receipt for gold purchases, many people still choose to forgot it. Understanding these five reasons behind this practice can shed light on consumer behavior and the challenges of enforcing GST compliance.

1. Avoiding GST to Save Money

One of the main reasons people avoid taking a GST receipt for gold purchases is to save money. By not taking a GST receipt, buyers believe they can:

  • Negotiate a Lower Price:

    Sellers might offer a discount equivalent to the GST amount, making the deal more attractive to buyers.

  • Reduce Overall Purchase Cost:

    For buyers, especially those making large purchases, saving on GST can lead to substantial cost reductions.

2. Preference for Cash Transactions

Another reason is the preference for cash transactions. Many buyers prefer paying in cash for gold purchases for various reasons:

  • Avoiding Paper Trails:

    Cash transactions leave no digital footprint, which some buyers prefer for privacy reasons.

  • Convenience:

    In some cases, cash transactions are faster and more straightforward than dealing with digital payments or credit

3. Lack of Awareness

A significant number of people are simply unaware of the importance of taking a GST receipt. This lack of awareness can stem from:

  • Limited Knowledge:

    Many buyers might not fully understand the implications of not taking a GST receipt, such as the loss of legal protection and difficulty in verifying the authenticity of their purchase.

  • Trust in Sellers:

    Some buyers trust the sellers implicitly and do not feel the need to request a GST receipt, assuming the transaction is legitimate without it.

4. Evasion of Taxes

There is also a segment of buyers who deliberately choose not to take a GST receipt to evade taxes. This can be due to:

  • Avoiding Detection:

    By not taking a GST receipt, buyers aim to keep their purchases off the record, which can help in avoiding income tax scrutiny.

  • Engaging in Black Market Practices:

    Some buyers may be involved in or inadvertently support black market activities by not requesting GST receipts.

5. Influence of Sellers

In some cases, sellers themselves may discourage buyers from taking a GST receipt. This can happen for various reasons:

  • Undeclared Income:

    Sellers might prefer cash transactions without receipts to keep the sales unreported and evade taxes themselves.

  • Offering Discounts:

    To attract more customers, sellers may offer discounts for cash transactions without a GST receipt.

Consumer either paid in cash or wanted to avoid GST, highlighting the importance of always taking a GST receipt for gold purchases.

Why You Must Always Take a GST Receipt for Gold Purchases

When purchasing gold, always take a GST receipt. This simple step can save you a lot of trouble and ensure you get the best value for your money. Here’s five reasons why it’s crucial to always ask for a GST receipt when buying gold.

1. Ensuring Authenticity and Quality

One of the main reasons to always take a GST receipt for gold purchases is to ensure authenticity and quality. A GST receipt is an official proof that you have bought gold from a legitimate source. It includes detailed information about the seller, the amount of gold purchased, and the tax paid. This helps in:

  • Verifying the legitimacy of the seller.

  • Ensuring the gold is of the stated purity and quality.

  • Providing a record of your purchase for future reference.

When you have a GST receipt, you can be confident that the gold you bought is genuine and meets the standards promised by the seller. This is particularly important in an industry where counterfeit products can be a significant issue.

2. Legal Protection and Consumer Rights

Another critical reason to always take a GST receipt is the legal protection it offers. In case of any disputes or issues with the gold you purchased, a GST receipt serves as a crucial piece of evidence. It can help you:

  • Return or exchange the gold if it is found to be of substandard quality.

  • Claim warranties or guarantees provided by the seller.

  • Seek legal recourse if the transaction was not as per the agreed terms.

Having a GST receipt ensures that you can exercise your consumer rights and get the necessary support if something goes wrong with your purchase.

3. Financial Documentation and Tax Benefits

Maintaining proper financial documentation is essential for personal finance management. A GST receipt for gold purchases can play a significant role in this aspect. It helps you:

  • Keep track of your investments.

  • Provide proof of purchase for insurance claims.

  • Avail of any tax benefits or deductions applicable to gold investments.

For instance, if you need to sell your gold in the future, having a GST receipt will make the process smoother and more transparent. It also helps in calculating the capital gains tax accurately, ensuring you comply with tax regulations.

4. Building Trust with Reputable Sellers

Always taking a GST receipt can help build trust with reputable sellers. When you consistently ask for a receipt, it indicates to the seller that you are an informed and conscientious buyer. This can lead to:

  • Better service and offers from the seller.

  • Access to exclusive deals and promotions.

  • Establishing a long-term relationship with trustworthy sellers.

Reputable sellers appreciate customers who value transparency and legality in transactions. By always requesting a GST receipt, you align yourself with sellers who prioritize ethical business practices.

5. Avoiding Black Market Transactions

One of the significant risks in buying gold without a GST receipt is inadvertently engaging in black market transactions. The black market for gold can be rife with illegal activities, including:

  • Smuggling of gold.

  • Sale of stolen or counterfeit gold.

  • Evasion of taxes and duties.

By always taking a GST receipt, you ensure that your purchase is above board and compliant with all legal requirements. This helps in maintaining the integrity of the gold market and discourages unethical practices.


In conclusion, always taking a GST receipt for gold purchases is a crucial practice for ensuring authenticity, legal protection, financial documentation, trust with reputable sellers, and avoiding black market transactions. By following this golden rule, you safeguard your investment and contribute to a more transparent and ethical gold market.