【India】GST Revamp: Jewellery Sector’s Tax Rate Steady at 3%; Industry Sees Indirect Gains but Mixed Outlook

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Editor’s Note

The government’s decision to maintain the current GST rate on gems and jewellery has elicited a divided response from the industry. While some anticipate a positive ripple effect from tax cuts in other sectors, others remain concerned about the direct impact on growth and consumer affordability.

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

Indian jewellers have expressed mixed reactions to the government’s decision to maintain the 3% GST rate on gems and jewellery. While some industry leaders believe that reduced GST rates in other sectors will indirectly boost demand and consumer spending, others worry that the unchanged rate will hinder growth and affordability, especially during the festive season.

No Direct Relief for Exporters
“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.

Boost in Disposable Income
“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,”

said GJC Vice Chairman Avinash Gupta. 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.

Renewed Optimism for the Sector
“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,”

said Saiyam Mehra, former chairman of GJC and director of Unique Chains and Jewels Limited.

Concerns Over Affordability and Costs
“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,”

said RiddiSiddhi Bullions (RSBL) managing director Prithviraj Kothari, as quoted by PTI. He added that while the unchanged GST provides clarity for investors and avoids disruption in the market, entry costs remain higher than global benchmarks.

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⏰ Published on: September 04, 2025