In India, silver is subject to the Goods and Services Tax (GST). As of 2025, the GST rate on silver is 3%. This applies to all forms of silver, including silver bars, grains, unwrought silver, and silver powder. This standardized rate has simplified the tax structure compared to the pre-GST era, which involved multiple state and central taxes.

GST Rate on Different Forms of Silver

• Raw Silver: Attracts 3% GST. This includes unrefined or unwrought silver intended for industrial or refining use.
• Silver Bars and Bullion: These are considered investment-grade silver and are taxed at 3%.
• Silver Coins: Silver coins that are not considered legal tender are taxed at 3%. These are often used for gifts, religious purposes (puja), or collections.
• Silver Ornaments and Jewellery: A GST of 3% applies to the total value, including the cost of the silver. Additionally, making charges for silver jewellery may attract an 5% GST if they are billed separately by the jeweller.

How to Calculate GST on Silver

The calculation of GST on silver involves several factors, including the price of silver per gram, the quantity purchased, and the purity of the silver. The formula to calculate the price of silver after taxation is:

1. Rate of Silver = Silver price per gram x the volume of the metal purchased x purity of the metal.
2. GST Amount = (3/100) x Price of Silver.
3. Total Price = Price of Silver + GST Amount.
4. Final Total Price = Total Price + Making Charges GST (if applicable).

For example, if the price of silver is ₹95 per gram, and you purchase 100 grams of pure silver, the calculation would be:

• Price of Silver = ₹95 x 100 x 1 = ₹9,500
• GST Amount = (3/100) x ₹9,500 = ₹285
• Total Price = ₹9,500 + ₹285 = ₹9,785
• If making charges are ₹489.25 (5% of the Total Price), then Final Total Price = ₹9,785 + ₹489.25 = ₹10,274.25

Input Tax Credit (ITC)

Businesses registered under GST can claim Input Tax Credit (ITC) on silver purchases if the silver is used for business purposes, such as manufacturing jewellery for resale. However, individual purchasers who buy silver for personal use cannot claim GST refunds.

GST on Import of Silver

Yes, GST is applicable to imported silver. When importing silver, the buyer must pay 10% of customs duty and 3% GST.

Impact of GST on Silver Prices

The implementation of GST has standardized the pricing of silver across India. Earlier, different states had varying VAT rates, which complicated the purchasing process. With a uniform 3% GST rate, the tax structure is now more transparent and regulated.

Recent Updates and Changes

It's important to stay updated on any potential changes to GST rates. As of July 26, 2024, there were discussions about increasing the GST rate on gold and silver from 3% to 5%. While this change was under consideration, it's crucial to verify the current applicable rate with the latest government notifications.

Taxation on Silver Investments

Investments in silver Exchange Traded Funds (ETFs) are subject to capital gains tax. The tax rates depend on the holding period:

• For silver ETFs, if the holding period is more than 12 months, the gains are taxed at a flat rate of 12.5% (plus applicable surcharge and cess).
• Gains from silver ETFs held for 12 months or less are taxed at a flat rate of 20%.