GST on Gold- Impact and How to avoid its Cons

By Team Gullak

Oct 18, 2024

3 min read

What is the GST on Gold?

Goods and services tax impacts the prices of several commodities, including gold. The GST on gold is 3% and is applicable whenever someone buys physical or digital gold. In the sections below, we will discuss how GST on gold impacts your investments and ways to tackle this.

Impact of GST on Gold on your Gold investments

Due to the GST on gold, whenever someone buys gold they need to pay an extra 3% charge on top of gold price. Here’s a table to show how GST would impact an investment of say, ₹1,00,000

Table: Impact of GST on Gold

How to tackle GST on Gold?

There are only 2 ways to avoid the cons of GST on Gold- if you’re to get extra returns on gold or if the GST were to be waived off.

With Gullak’s gold investment feature, Gullak Gold+, both of these are possible:

1. Extra 5% Gold+ plan:

The extra 5% plan allows users to grow their gold quantity by 5% every year. So, not only do you get the benefit of gold price increase but your gold quantity also increases at the same time.

Here’s how your gold investments would look if you’re to invest 100 gms in the extra 5% plan:

Table: How your gold grows with Gullak Gold+

In the above table, you can see that although there’s a one time 3% GST getting charged on Gold, you get the benefit of the extra 5% gold every year. This in-turn makes the GST on gold very minuscule compared to the returns. Plus, there are no lock-in periods, you can withdraw anytime as cash or order gold coin or redeem jewellery at Gullak’s partner stores like Caratlane by Tanishq or Kalyan.

2. Extra 5% GST waive off plan:

As the name suggests, with the GST waive-off plan, you do not need to pay GST on gold. The GST waive off plan works in a similar manner to the extra 5% plan where you get extra gold every year. In the 1st year, you will get 2% extra gold and next year onwards you will continue to get 5% extra gold. This plan comes with a 1 year lock-in period. After the lock-in period, you can either stay invested and keep earning extra gold or withdraw as cash or gold coins or redeem jewellery at Gullak’s partner stores.

Concluding thoughts on GST on Gold

While GST on Gold implies gold investors to pay an extra charge on gold, with gold assets like Gullak Gold+ you can tackle the cons of the extra charge and get extra gold every year at the same time. Like any other gold asset, you get to sell your investments as cash or gold coins or redeem jewellery.