Jaipur's gem and jewellery trade runs on a chain of small transactions: rough stones imported or bought locally, sent for cutting in Johari Bazaar, set into gold in a Sitapura unit, then exported. Every link in that chain has a GST, customs or hallmarking rule attached, and in 2026 the department has better data on each link than ever before. Here is the map we use with our jewellery and gems clients in Jaipur.
GST rates: the special slabs survived GST 2.0
GST 2.0 abolished the 12% and 28% slabs from 22 September 2025, but the special rates for this sector were deliberately kept. That means your rate card looks like this:
| Supply | GST rate |
|---|---|
| Gold, silver, finished jewellery | 3% |
| Loose diamonds and precious stones (rough or polished) | 0.25% |
| Job work on diamonds for a registered principal | 1.5% |
| Jewellery-making job work and making charges billed separately | 5% |
The common mistake we see is on job work invoices: karigars billing 5% where 1.5% applies to diamond work, or principals absorbing making charges into the 3% jewellery value when the karigar has already charged 5% separately. Either way the mismatch surfaces in GSTR-2B, and with the auto-populated GSTR-3B liability now locked, corrections have to flow through GSTR-1A rather than a quiet edit at filing time.
Exports: LUT or IGST refund — pick deliberately
Exports are zero-rated, and you have two routes. Under a Letter of Undertaking (LUT) you export without charging IGST and claim a refund of unutilised input tax credit. Or you pay IGST on the export invoice and claim it back through the customs-linked refund once the shipping bill and GSTR-1 match.
For most Jaipur jewellery exporters the LUT route wins: your inputs are taxed at 0.25% and 3%, so the credit pool is small relative to turnover, and blocking working capital in IGST at 3% on high-value consignments makes little sense. The IGST-paid route can suit units with large accumulated credit from 18% overheads. Whichever you choose, remember the LUT is valid for one financial year only — the FY 2026-27 LUT should have been filed in RFD-11 before your first zero-rated supply this year. If you missed the renewal, regularise it now rather than letting exports ride on an expired LUT.
E-invoicing and the ₹5 crore trap
E-invoicing is mandatory once your turnover crossed ₹5 crore in any financial year since 2017-18 — not just last year. Jewellery turnover is high even when margins are thin, so plenty of two-person Johari Bazaar firms are over the line without realising it. An invoice issued without an IRN when you are covered is not a valid invoice, which puts your buyer's credit and your own export refund paperwork at risk.
Job work flows: the paper trail matters
Goods sent for cutting, polishing or setting must move on a delivery challan, get reported in ITC-04, and come back within the statutory window — one year for inputs. Stones that sit with a karigar beyond that are treated as supplied, with tax and interest to match. In a trade built on trust and informal memos, this is the single most common gap we find when a new client's books reach us. Imported rough stones add a customs layer: keep bills of entry tied to lot numbers so consumption can be traced from import to export invoice.
Hallmarking and RoDTEP
For domestic sales of gold jewellery, BIS hallmarking with a unique HUID is mandatory for covered carats in notified districts, Jaipur included. Exports are exempt from mandatory hallmarking, but if export rejects or excess stock flow into your domestic counter, they need hallmarking before sale — so keep the two streams separate in your inventory system.
RoDTEP remains live for the sector in 2026, and since June 2025 its cover extends to advance authorisation holders, SEZ and EOU units — relevant for Sitapura. Rates are product-specific and revised periodically, so check the current DGFT schedule for your HS codes rather than assuming last year's scrip value.
What an audit expects from your books
When a jewellery exporter gets scrutiny, the officer's first asks are predictable: karat-wise and lot-wise stock records, wastage norms for job work, gold ledgers that reconcile grams — not just rupees — and export documentation matching shipping bills to invoices and BRCs. Valuation swings in gold make rupee-only stock records useless as evidence. If your current books cannot produce a grams-in, grams-out statement, fix that before the department asks; our bookkeeping and MIS work for jewellers is built around exactly this.
How we can help
We work with gem and jewellery businesses across Jaipur — from Johari Bazaar traders to Sitapura export units — on GST filings, LUT renewals, refund claims and notice replies. If your job work trail, e-invoicing status or export refunds need a health check, a short review now is far cheaper than a demand later.
This article is general information, not tax advice. Rules and rates can change; confirm specifics for your business before acting.