GST Rate on Diamonds 2025: HSN Code and Details

As the diamond industry grows and evolves, it’s crucial for businesses and consumers to understand the current Goods and Services Tax (GST) rates and the corresponding HSN (Harmonized System of Nomenclature) codes. To simplify taxation, the government has set specific GST rates for diamonds—whether they are polished, uncut, or set in jewellery. This article outlines the latest GST rates for diamonds in 2025, along with their applicable HSN codes, helping manufacturers, retailers, and buyers stay compliant and conduct smooth transactions within the diamond trade.

Applicability of GST on Diamonds

The GST rate on diamonds varies based on their type, use, and stage of processing. Key points include:

Loose Diamonds:
- Rough Diamonds: GST is charged at 0.25% on uncut, rough diamonds.
- Polished Diamonds: GST is also 0.25% on polished diamonds not set in jewellery.
Diamond Jewellery:
Diamonds set in jewellery (such as rings or necklaces) attract a 3% GST on the total value, including making charges, diamond cost, and metal.
Imports:
GST applies at 0.25% for diamonds and 3% for diamond jewellery, payable at customs clearance.
Exports:
Exports of diamonds are zero-rated under GST, enabling exporters to claim input tax refunds.
Industrial Diamonds:
Industrial diamonds used in tools and equipment attract 0.25% GST.
Job Work:
GST on diamond processing job work is 1.5% for registered workers, while labour or repair work attracts 18% GST

GST on Rough Diamonds

Rough diamonds, a key commodity in the global diamond market, fall under a specific GST framework in India. Here’s what businesses need to know:

GST Rate: 0.25% on rough, unworked diamonds.
Applicability: GST applies at both sale and purchase points, ensuring uniform taxation across all transactions—whether between manufacturers, traders, or others.
Compliance: Businesses must register for GST and comply with filing and documentation requirements.
Input Tax Credit (ITC): Eligible businesses can claim ITC on GST paid for rough diamond purchases, offsetting their tax liability.
Exports: Rough diamonds are zero-rated under GST when exported, allowing exporters to claim refunds on input taxes and boosting international competitiveness

GST on Polished Diamonds

Polished diamonds, a valuable component of jewellery and luxury markets, attract different GST provisions:

GST Rate: 3% on polished diamonds not set in jewellery.
Applicability: Applies to both wholesale and retail sales.
Compliance: Sellers must issue proper invoices and file returns timely to avoid penalties.
Exports: Polished diamonds are zero-rated, enabling exporters to claim input tax refunds.
ITC: Businesses can claim credit on GST paid for raw materials and manufacturing inputs.
Inventory: Maintaining accurate inventory records is crucial for compliance

GST on Diamond Imports and Exports

Understanding GST on imports and exports is essential for smooth international trade:

Import GST: GST must be paid at customs at applicable rates (0.25% for diamonds, 3% for jewellery).
Export GST: Exports are zero-rated; no GST is payable and input tax refunds are claimable.
Documentation: Accurate paperwork is key for refund claims and compliance.
ITC: Importers can claim ITC on GST paid at import.
Compliance: Following all GST and trade regulations is crucial to avoid penalties

Place of Supply

Under Section 10 of the IGST Act, 2017, the place of supply for diamond jewellery is where the goods are delivered:

Intra-state supply: CGST and SGST apply for local state transactions.
Inter-state supply: IGST applies for deliveries across state borders.
For imported unpolished diamonds that are processed and exported, the place of supply is the recipient’s location, subject to specific conditions (GST Circular No. 27/2019)

Time of Supply

GST on gems and diamond jewellery is due at the earlier of:

Receipt of final payment by the jeweller, or
Delivery of the jewellery to the buyer

E-Way Bills and E-Invoicing

E-Way Bills: Mandatory for transporting precious stones (HSN 71) and gold jewellery to improve tracking and compliance.
E-Invoicing: Required for businesses with turnover above ₹10 crore

Input Tax Credit (ITC) on Diamond Jewellery

Jewellers can claim ITC on GST paid for inputs used in production, subject to:

Proper invoices and documentation.
Supplier having deposited GST with the government.
Regular reconciliation of purchase and sales data

Advance Rulings on GST for Diamonds

Advance rulings help clarify:

GST classification of different diamond types.
Applicable tax rates.
Export procedures and documentation.
ITC eligibility.
Compliance obligations to avoid disputes

GST Compliance and Documentation

Key compliance steps include:

GST registration if turnover exceeds threshold.
Issuing GST-compliant invoices.
Timely filing of GST returns (GSTR-1, GSTR-3B).
Maintaining detailed sales, purchase, and ITC records.
Preparing for possible audits.
Training staff on GST procedures

How to Calculate GST on Diamond Jewellery?

Composite Supply: If jewellery includes diamonds and other precious stones/services, the entire supply is taxed at the rate applicable to the principal supply (usually 3%).
Mixed Supply: If jewellery is bundled with items taxed at different rates (e.g., a watch at 18%), the highest GST rate applies to the entire bundle.
Making Charges: Included in the taxable value; GST at 3% applies to the total amount (jewellery + making charges).
Old/Used Jewellery: No GST on purchase from customers (reverse charge doesn’t apply). GST applies when selling used jewellery bought from registered suppliers, allowing ITC claims.
Exchange of Old for New Jewellery: GST is charged on the full value of the new jewellery.

Job Work for Diamond Jewellery

Registered job workers pay 1.5% GST on processing services.
Labour or repair work on old jewellery attracts 18% GST

GST Rates & HSN Codes for Diamonds

HSN Code	Description	GST Rate (%)
7102	Diamonds, worked or unworked, not mounted/set	0.25
71021000	Unsorted diamonds, worked or unworked	0.25
710221	Unworked, simply sawn, cleaved or bruted diamonds	0.25
710229	Other diamonds, industrial and non-industrial	0.25
710239	Other cut or worked diamonds, not mounted	0.25

Loose Diamonds GST rate

The GST rate on loose diamonds, whether polished or unpolished and not mounted or set, is fixed at 0.25% as per the relevant HSN codes listed under Chapter 71 of the GST schedule

GST on Diamond Ring

GST on diamond rings is charged at 3% under HSN Code 7113. This rate applies to the total value of the ring, which includes the diamond, the metal used (such as gold or platinum), and any making charges. Whether bought outright or received in exchange for old jewellery, GST is calculated on the full invoice value of the new ring, in line with current tax regulations

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About the Author

Rohan

Rohan is an accomplished writer known for simplifying complex legal topics into practical, easy-to-understand insights. Her content equips entrepreneurs with the legal knowledge they need to confidently start, run, and grow their businesses

May 31, 2025

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