Karva Chauth shopping 2026: Planning to buy lab-grown diamond jewellery? GST, making charges, tax rules, resale details

With Karva Chauth coming this Thursday, October 29, many couples look to buy jewellery, including gold, silver, and diamonds. There is a growing craze for lab-grown diamonds as well.

But how are they taxed under GST, and how do their cost and resale values compare with those of other jewellery? Here’s what you need to know about GST, making charges, capital gains tax on selling and resale value.

What are lab-grown diamonds and their GST rate?

Lisa Mukhedkar, Co-Founder & CEO, Aukera, said lab-grown diamonds are real diamonds, with the same essential chemical composition and crystal structure as mined diamonds. The key difference lies in their origin: lab-grown diamonds are created in controlled laboratory environments rather than extracted from the earth.

“The applicable GST rate on diamond jewellery, including lab-grown diamond jewellery, is 3%,” she added.

Sakchi Jain, CA and Financial Educator, added that lab-grown diamond jewellery attracts 3% GST, the same as natural diamond and gold jewellery, under HSN 7113.

The only category where the rate differs is loose lab-grown diamonds, meaning the stone before it is set into any jewellery. That attracts GST at 0.25% under HSN 7104. Once the stone is set into a piece of jewellery, the rate becomes 3%, Jain added.

How can buyers verify the authenticity of lab-grown diamond jewellery?

Mukhedkar said it is important to understand that gold and diamonds serve different purposes in lab-grown diamond jewellery. Gold forms the setting, while the diamonds are the gemstones held within it. Buyers should look for independent diamond certification, BIS hallmarking for gold, and clear product specifications.

Jain advised buyers to check the diamond and gold components separately. For the diamond, ask for a grading certificate from the International Gemological Institute (IGI), Solitaire Gemmological Laboratories (SGL), or Gemological Institute of America (GIA). It confirms the stone is lab-grown and specifies its cut, colour, clarity, carat weight, and manufacturing method (CVD or HPHT).

BIS has also introduced mandatory labelling rules. A lab-grown diamond must now be labelled as “laboratory-grown diamond” or “laboratory-created diamond” on the certificate. Terms like LGD or lab diamond are not permitted, and the manufacturing method has to be disclosed.

For the gold component, look for the BIS Hallmark. 916 means 22K and 750 means 18K. Most lab-grown diamond jewellery in India is set in 18K or 14K gold. Also, ask the jeweller for their buyback or exchange policy in writing before you buy, Jain explained.

What are the making charges for lab-grown diamond jewellery?

Jain said there is no fixed rate. Charges vary by design, whether the piece is handcrafted or machine-made, and whether it is purchased from a branded store or local jeweller. A general range is 10% to 25% of the gold cost, or a flat per-gram rate on the gold used.

What is the resale value of lab-grown diamond jewellery?

Jain said a 1-carat lab-grown diamond solitaire ring in 18K gold typically costs ₹60,000– ₹1.2 lakh in India, compared with ₹3 lakh or more for an equivalent natural diamond ring.

However, lab-grown diamond prices have fallen sharply as production has scaled up. Buyers can typically recover 20%–30% of the diamond’s purchase price, compared with 40%–60% for natural diamonds, though both are not great investments either. Gold in the setting is valued separately at market rates.

Indicatively, a lab-grown diamond piece bought for ₹1 lakh might fetch ₹25,000– ₹35,000 after one year and ₹20,000– ₹30,000 after two or five years. A natural diamond piece bought for ₹4.5 lakh might fetch ₹1.8 lakh– ₹2.5 lakh after one year, with a similar range beyond that, she explained.

Mukhedkar added that natural diamonds do not necessarily offer better buyback or exchange benefits; these depend on individual jewellers’ policies.

Jain advised buyers to check with the original jeweller before selling elsewhere, as store buyback or exchange offers may be better than open-market resale.

What are the tax implications when selling lab-grown diamond jewellery?

Mukhedkar said lab-grown and mined diamonds are both treated alike under the applicable capital gains tax rules.

Selling within 24 months attracts short-term capital gains tax at the individual’s income tax slab rate. Selling after 24 months attracts long-term capital gains tax at 12.5% without indexation, following Budget 2024. Earlier, LTCG was taxed at 20% with indexation, Jain added.

Disclaimer: This article is for informational purposes only. Please consult the respective jeweller and a tax expert before making a purchase or tax-related decision.