GST revamp: Jewellery sector’s tax rate steady at 3%; industry sees indirect gains but mixed outlook

Jewellers on Thursday welcomed the government’s move to reduce Goods and Services Tax (GST) rates in several sectors, saying the decision would indirectly benefit the gems and jewellery industry by boosting demand, even though the sector’s tax rate remains unchanged at 3%.“The current GST reforms (GST 2.0) offer no direct and immediate relief to gems and jewellery exporters. Importantly, the gems and jewellery sector was excluded from the latest reforms. The reforms do not offset the adverse impact of the US tariffs, since input costs and compliance burdens remain unchanged,” All India Gem and Jewellery Domestic Council (GJC) chairman Rajesh Rokde told PTI.However, he added that by stimulating consumption, the changes would indirectly support the industry in the long run. “The new rates, effective from September 22, are expected to boost consumption, with the overall fiscal impact of the overhaul estimated at around Rs 50,000 crore,” Rokde said.At its meeting on Wednesday, the GST Council confirmed that the tax rate for gems and jewellery would remain unchanged at 3%.GJC Vice Chairman Avinash Gupta said, “With the rollout of next-gen GST reforms, we believe, consumers will experience a tangible increase in disposable income, thanks to the combined effect of income tax relief and reduced GST rates.

This dual benefit puts more money directly into the hands of households, encouraging aspirational purchases and lifestyle upgrades.”He added that the simplified two-tier GST structure and lower rates on daily essentials would encourage confidence and spending, especially during the festive season. “For the gem and jewellery sector, this presents a significant opportunity, as more consumers are now empowered to invest in jewellery, not just as adornment, but as a symbol of prosperity and financial security,” Gupta said.Saiyam Mehra, former chairman of GJC and director of Unique Chains and Jewels Limited, called the reforms a crucial moment for India’s consumption-driven economy. He said, by streamlining tax slabs and reducing the burden on essentials, the government had strengthened consumer purchasing power. “For the gem and jewellery industry, this translates into renewed optimism, where jewellery is not just a luxury, but a preferred investment and cultural expression.

We believe this reform will unlock fresh demand, especially from emerging markets and younger buyers seeking value and authenticity,” he said.RiddiSiddhi Bullions (RSBL) managing director Prithviraj Kothari, however, said the decision to keep GST unchanged at 3% on gold and silver and 5% on jewellery-making charges offered stability but came with mixed results, PTI quoted.“For jewellers, it doesn’t change how they do business as there is no relief on margins, despite their hopes of getting a rate cut, in order to stimulate demand, to the end-consumer.

Higher costs may still have a detrimental impact on affordability, particularly during the festive season,” he said.Kothari added that while the unchanged GST provides clarity for investors and avoids disruption in the market, entry costs remain higher than global benchmarks. “On the one hand, the decision should defend the government’s revenue stream, but both jewellers and buyers may feel that their growth opportunities remain hindered,” he said.