GST on Gold in Kerala: Rates, Making Charges & E-Way Bill Rules

E-way bill ₹50,000 se upar goods movement par mandatory electronic document hai.

Kerala is one of India’s largest gold markets, southern states together account for an estimated 40–60% of the country’s gold consumption. This guide explains how GST applies to gold purchases in Kerala today: the applicable rates, how tax is calculated on jewellery and making charges, Kerala’s unique e-way bill rules for gold, and how the current regime evolved from the state’s pre-GST demands for a lower rate.

Current GST Rates on Gold in Kerala

GST rates on gold are uniform across India, so buyers in Kerala pay the same tax as anywhere else in the country:

These rates apply to 18K, 22K, and 24K gold alike. Notably, the GST Council kept the 3% rate on gold unchanged in the GST 2.0 rate rationalisation effective September 22, 2025, even as most other goods moved into the simplified 5% and 18% slabs.

How GST on a Gold Purchase Is Calculated

Suppose you buy a gold chain in Kochi with a gold value of Rs. 1,00,000 and making charges of Rs. 10,000:

• GST on gold value: 3% of Rs. 1,00,000 = Rs. 3,000
• GST on making charges: 5% of Rs. 10,000 = Rs. 500
• Total payable: Rs. 1,13,500

The effective tax on the total bill works out to roughly 3.2%, depending on the making-charge percentage.

Kerala’s E-Way Bill Rules for Gold

Kerala was the first state to mandate e-way bills for the intra-state movement of gold. While gold is exempt from e-way bill requirements in most of India, Kerala requires an e-way bill for moving gold (Chapter 71 goods, excluding imitation jewellery) worth more than Rs. 10 lakhs within the state. Jewellers, bullion dealers, and manufacturers transporting gold within Kerala must generate these bills to avoid detention and penalties.

For details on thresholds and generation steps, see our guides on Kerala e-way bill rules and e-way bill requirements for gold and precious stones.

How Kerala Shaped the Gold GST Debate

Before GST was rolled out in July 2017, gold taxation was a contentious issue, and Kerala was at the centre of the debate. The Kerala jewellers’ association had urged the state government to support a uniform 1.25% GST rate on gold and to abolish the state’s ‘purchase tax’ on gold jewellery. The All India Gems and Jewellery Trade Federation similarly proposed a fixed 1.25% rate, while the India Bullion & Jewellers Association anticipated a rate closer to 8% along with a cut in import duty.

Kerala’s then finance minister, a prominent voice in the GST Council, pushed for a higher 4–5% rate instead, Kerala was collecting roughly Rs. 400 crores annually from its 5% VAT on gold and feared revenue loss. The GST Council ultimately settled on a special 3% rate for gold, outside the standard slabs, a compromise between the industry’s 1.25% demand and revenue-concerned states like Kerala.

What Gold Buyers and Jewellers in Kerala Should Keep in Mind

• Buyers: Insist on a proper tax invoice showing the gold value, making charges, and GST breakup separately. This protects you on purity claims and matters for exchange or resale.
• Exchanging old gold: When old jewellery is exchanged for new, GST applies on the full value of the new jewellery in most cases; a jeweller buying gold from an unregistered individual does not attract GST on that purchase.
• Jewellers: GST registration is mandatory once turnover crosses Rs. 40 lakhs. Input Tax Credit can be claimed on making charges paid to registered job workers and on business inputs.
• Transporters: Remember Kerala’s Rs. 10 lakh intra-state e-way bill threshold for gold, it is stricter than the national norm.

For a broader national overview, read our guide to GST on gold purchases in India.

FAQs on GST on Gold in Kerala

• What is the GST rate on gold in Kerala?
  3% on the gold value plus 5% on making charges, the same as the rest of India. The rate was unchanged by the GST 2.0 reforms of September 2025.
• Did the 1.25% GST demand by Kerala jewellers succeed?
  No. The GST Council fixed gold at a special 3% rate in 2017, higher than the industry’s 1.25% proposal but lower than Kerala’s preferred 5%.
• Is an e-way bill required to transport gold in Kerala?
  Yes. Kerala mandates e-way bills for intra-state movement of gold worth more than Rs. 10 lakhs, the first state in India to do so.
• Does GST apply when I exchange old gold jewellery?
  GST at 3% generally applies on the value of the new jewellery purchased. The jeweller’s purchase of old gold from an unregistered individual is not subject to GST.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Consult a qualified tax professional for advice specific to your situation.

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Frequently Asked Questions

Kab zaroori?

₹50,000 se zyada value ke goods movement par.

Validity?

Har ~200 km ke liye 1 din.

Expire ho jaye to?

Movement rok kar extend/naya banaye; penalty lag sakti hai.