Finance Minister Nirmala Sitharaman will present the Union Budget for the financial year 2025-26 on February 1. Gold and silver had become much cheaper after the last budget, as the Finance Minister had reduced the customs duty. This time too, the jewelry industry is pleading with Finance Minister Nirmala Sitharaman to reduce GST on gold. If the government accepts their suggestion, then this time too gold can become cheaper after the budget.

How much GST is levied on gold?

The current rate of GST on gold is 3 percent. This means that if you are buying gold worth Rs 10,000, then you will have to pay Rs 300 GST on it. The gems and jewelry industry is demanding a reduction in the rate of Goods and Services Tax (GST) on gold in Budget 2025. The industry says that the current 3 percent GST is a huge burden, which has a bad effect on competition. This also reduces employment opportunities.

How much GST is being demanded
The jewelry industry is demanding to reduce the GST rate on gold from 3 percent to 1 percent in the upcoming budget. It says that this will provide great relief to the industry and customers. The industry argues that the price of gold is constantly increasing. In such a situation, that higher GST is a big burden on the industry as well as the customers. This is also affecting the purchase and sale of gold.

What will be the benefit of reducing GST?
If Finance Minister Nirmala Sitharaman reduces GST on gold in Budget 2025-26, it will reduce the price of jewelry. The industry hopes that this will boost gold sales, especially in rural areas. The industry is pleading for the implementation of a concessional GST rate for lab-grown diamonds. Currently, the same GST rate applies to both natural and lab-grown diamonds.

Will the government reduce customs duty again?
Experts believe that this time there is little scope for reducing custom duty in the budget. Harish V, Head of Commodities at Geojit Financial Services, says, 'The government has reduced the import duty from 15 to 6 in the last budget. So this time there is very little scope for change in the existing duty structure. The government can start promoting the recycling of scrap gold within the country to reduce the increasing import of gold. '

Generally, the Indian budget will not have any major impact on international gold prices. However, if there is any change in customs duty on bullion, the prices will react accordingly. For example: any increase in customs duty can increase domestic gold by the same percentage.

Gold industry's expectations from Budget 2025
The jewelry industry hopes that policy continuity will continue in Budget 2025, which will benefit the industry. MP Ahammed, Chairman of Malabar Group, says that the budget needs policies that promote disposable income and consumption to boost demand for precious jewelry. Measures to make the gold monetization scheme more attractive for people in the budget can also be a very good initiative. This will bring the gold lying in homes into the market. This will play an important role in reducing gold imports, which will also benefit the government treasury.'

How much did gold become cheaper after the budget?

Finance Minister Nirmala Sitharaman presented the budget on 23 July last year. In this, she announced to reduction of the custom duty on gold from 15 percent to 6 percent. Due to this, gold became cheaper by Rs 6000 per 10 within 15 days. During that time, there was a sharp jump in the demand for gold. The industry hopes that if this time too relief is given in the form of a GST reduction in the budget, then there can be a huge jump in the purchase of jewelry.

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