Bullion (B2B) vs Retail (B2C) Jewellery Supply Classification

A national jewellery group’s group controller opens the consolidated GSTR-1 tax-rate summary for the quarter ending 30 June 2026. The bullion wholesale arm — a separate GSTIN operating out of Mumbai — has filed ₹8,420 crore of outward supplies in Table 4, invoice-by-invoice, with 147 recipient GSTINs across the country. The retail arm — a distinct GSTIN operating out of Bangalore, part of the same PAN — has filed ₹1,340 crore across Table 5 (inter-state B2C-large invoices) and Table 7 (state-wise B2C-small summary). A cross-check between the bullion arm’s Table 4 outward supply to the retail arm’s Karnataka GSTIN and the retail arm’s GSTR-2B inward supply shows a ₹47 crore gap — 12 stock-transfer invoices raised by Mumbai to Bangalore under Rule 28 valuation are missing from the Bangalore GSTR-2B for the same period. The gap is not a reconciliation loss — it is a filing-timing lag — but the audit exposure it represents at Section 74 is precisely the reason bullion retail jewellery GST supply classification India is the highest-consequence classification the group makes every month. Get the flag wrong at invoice ingestion, and the downstream reconciliation cannot correct it without a Section 34 credit note plus GSTR-1 amendment.

Quick reference

The reconciliation in one paragraph

A jewellery group that runs both a bullion wholesale arm and a retail arm faces three parallel GST filing flows every month, plus a fourth for intra-group stock transfers. The bullion arm’s outward supplies are B2B — every recipient is another jeweller, a refiner, or a bank buying gold, and every invoice must land in Table 4 of GSTR-1 with a verified recipient GSTIN. The retail arm’s outward supplies split into two tables: any inter-state supply to an unregistered customer above ₹2.5 lakh (a Karnataka-registered store selling to a walk-in customer with a Maharashtra address for a ₹4 lakh wedding set) goes to Table 5 invoice-by-invoice with place of supply; everything else (intra-state B2C, or inter-state B2C below ₹2.5 lakh) collapses into Table 7 as a state-wise consolidated summary at the tax-rate level only. Intra-group stock transfers from the bullion arm’s Mumbai GSTIN to the retail arm’s Karnataka GSTIN are distinct-person supplies under Section 25(5), valued at open market value or 90% of the retail price under Rule 28, charged at IGST, and filed in Table 4 of the Mumbai arm’s GSTR-1 with the Karnataka arm’s GSTIN as recipient. On top of these, Rule 46r requires a dynamic QR code on every B2C invoice at group entities whose aggregate turnover exceeded ₹500 crore, Section 269ST caps cash receipts at ₹2 lakh per transaction, and Rule 114B requires PAN capture on any invoice above ₹2 lakh. The classifier that assigns each outward supply to the right table before invoice ingestion is the single most consequential control in the group’s GST posture.

What the bullion-plus-retail jewellery group actually looks like in India

A national jewellery group operates a bullion wholesale arm out of Mumbai — a separate GSTIN (say, 27AAAAA1234A1Z5) that procures gold from refiners in Ahmedabad, imports gold under the tariff-rate quota, holds a bank-authorised participant licence for the OTC bullion market, and sells to other jewellers, smaller retailers, banks, and industrial users of gold. The bullion arm’s average invoice size runs into hundreds of grams to tens of kilograms of gold, at the day’s spot rate, with 3% GST layered on the invoice value. Every recipient is a registered person — a jeweller with a GSTIN, a refiner with a GSTIN, a bank with a GSTIN — and the bullion arm’s entire outward supply flow is B2B under GSTR-1 Table 4.

The same group operates a retail arm out of Bangalore — a distinct GSTIN (say, 29AAAAA1234A1Z2, same PAN but different state) that runs a network of 411 branded jewellery stores across the country. The retail arm buys inputs from the group’s bullion arm (intra-group distinct-person transfer under Section 25(5)), from independent bullion suppliers, from karigar workshops (making labour), and from OEM manufacturers of finished jewellery. It sells to walk-in customers, online customers via its e-commerce site, and to institutional buyers such as corporate gifting departments and wedding trousseau curators. The retail arm’s outward supply flow is 96% B2C by invoice count — walk-in individual customers with no GSTIN — but 4% B2B by count and 22% by value, because the institutional and corporate gifting flows sit at high average ticket sizes.

Groups that operate the same architecture in India include the Malabar Gold & Diamonds group (bullion arm plus retail chain), the Kalyan Jewellers group (bullion procurement centralised, retail decentralised), the Tanishq operation under the Titan Company (bullion sourced centrally, retail via franchise and company-owned stores), the Senco Gold & Diamonds group (bullion and retail in the same corporate entity), the Joyalukkas group (bullion procurement centralised, retail via wholly-owned subsidiaries), and the Reliance Jewels arm of Reliance Retail. Illustrative structures vary — some groups run bullion and retail under one PAN with two state GSTINs, others under two separate PANs with fully independent registrations, and still others through franchise arrangements where the bullion arm supplies inventory on principal-to-agent basis to franchisee-operated stores. The GST classification of each supply depends on the entity structure the group has chosen.

The regulatory overlay — Section 25 distinct persons, Rule 28 valuation, Section 269ST cash cap

The distinct-person framework in Section 25(4) and Section 25(5) of the CGST Act is the first classification decision. A single legal entity with one GSTIN in one state cannot supply to itself — internal movement of gold from the wholesale team to the retail team within the same registration is a stock transfer within one entity, out of GST scope. But the same legal entity registered in two different states (Mumbai bullion arm, Bangalore retail arm, same PAN) is two distinct persons under Section 25(5), and supplies between them are taxable even without consideration where made in the course or furtherance of business. Rule 28 of the CGST Rules values the supply at open market value; where OMV is not ascertainable, at the value of like goods; and as a last resort, at 90% of the price charged by the recipient to an unrelated customer for like goods. A ₹10 crore stock transfer of 22-carat gold from Mumbai to Bangalore therefore attracts IGST at 3% on the OMV — roughly ₹30 lakh of IGST — that the Mumbai arm reports as outward supply in Table 4 and the Bangalore arm claims as inward supply in GSTR-2B.

The Section 269ST cash cap runs alongside the GST posture on the retail side. A retail customer buying a ₹5 lakh wedding necklace cannot pay the whole amount in cash — Section 269ST of the Income-tax Act 2025 prohibits any person from receiving ₹2 lakh or more in cash from a single person in respect of a single transaction or a single event. The penalty under Section 271DA is equal to the amount received in cash. Retailers who split a ₹5 lakh sale into three cash receipts of ₹1.66 lakh each fall foul of the “single event or occasion” clause — a wedding purchase delivered to one customer for one occasion is one transaction regardless of how many invoices carry the amount. Rule 114B additionally requires PAN capture on any invoice above ₹2 lakh regardless of payment mode, so a ₹3 lakh invoice paid by UPI still triggers the PAN capture requirement. The reconciliation control that surfaces exposure is a per-invoice classifier that flags any cash receipt above ₹2 lakh for finance review before the invoice is accepted, and cross-checks the payment-mode capture against the invoice value at ingestion.

The Rule 46r dynamic QR code applies only on the B2C side and only when the group entity’s aggregate turnover in any preceding financial year from 2017-18 onwards exceeded ₹500 crore. National jewellery chains cross this threshold at the entity level, so every store operated by the entity is in scope. The QR code encodes the supplier GSTIN, a unique invoice reference, the invoice value, and a UPI virtual payment address that lets the customer complete payment by scanning the code. The e-invoicing IRN QR code under Rule 48(4) applies separately on the B2B side for entities above the e-invoicing turnover threshold — the two QR codes coexist on different invoice types.

A worked example — an illustrative bullion and retail supply matrix

An illustrative jewellery group (modelled loosely on the operating pattern common to Malabar Gold & Diamonds, Kalyan Jewellers, and the Titan Company’s Tanishq operation) has aggregate group turnover of ₹9,760 crore for the quarter ending 30 June 2026. The bullion arm registered in Maharashtra (27AAAAA1234A1Z5) reports outward supplies of ₹8,420 crore. The retail arm registered in Karnataka (29AAAAA1234A1Z2) reports outward supplies of ₹1,340 crore.

Illustrative — public disclosures do not reveal quarter-level entity-wise supply breakdowns; the figures below are representative of the operating pattern, not actual group data. Cross-verify against your own GSTR-1 tax-rate row before action.

The supply matrix for the quarter breaks down as follows.

The bullion arm’s Table 4 outward supply of ₹630 crore to the retail arm’s Karnataka GSTIN must reconcile against the retail arm’s GSTR-2B inward supply from the Mumbai GSTIN for the same reference period. In the quarter under review, the retail arm’s GSTR-2B shows ₹583 crore of inward supply from Mumbai — a ₹47 crore gap. The reconciliation traces the gap to 12 stock-transfer invoices raised by Mumbai in the last week of the quarter that landed in the recipient’s GSTR-2B one month later, in the following filing cycle. The gap is not a loss — it is a filing-timing lag — but the audit exposure requires the group to document the timing explanation in the reconciliation working, cross-reference the outward Table 4 line to the inward GSTR-2B line by invoice number, and defend the position at Section 74 assessment.

The retail arm’s Table 7 state-wise consolidated summary aggregates 1.84 million individual B2C invoices into a summary at the tax-rate level — 3% row, 5% row, 0.25% row, 18% row, per state. The Table 7 filing does not carry invoice-by-invoice detail, but the underlying store-level POS export must retain every invoice for at least the period required under Section 36 of the CGST Act (72 months from the annual return due date). The mixed-rate jewellery invoice reconciliation walks the line-item level within a single retail invoice; the classification here operates one level above, deciding which GSTR-1 table the whole invoice belongs to.

Common reconciliation breakages

• B2B invoice mis-flagged as B2C. A jeweller-to-jeweller sale filed in Table 7 instead of Table 4 collapses the recipient’s ITC availability — the recipient cannot see the invoice in their GSTR-2B and cannot claim the 3% credit. The correction requires a GSTR-1 amendment within the November-following-FY window under Section 39(9), plus a rectification communication to the recipient. Common root cause: the recipient GSTIN was not captured at invoice ingestion because the store attendant checked “no GST” instead of prompting for the GSTIN.

• B2C-large invoice filed as B2C-small. An inter-state walk-in sale above ₹2.5 lakh (a Karnataka store selling to a customer with a Kerala delivery address for a ₹4 lakh set) filed in Table 7 instead of Table 5 loses the invoice-level place-of-supply detail. The department cross-checks Table 5 against high-value inter-state consumer transactions; a Section 74 assessment on the missing Table 5 line requires the retailer to reconstruct the invoice-by-invoice trail from the store-level POS export.

• Intra-group stock transfer at cost, not OMV. The Mumbai bullion arm transferring gold to the Bangalore retail arm at cost (ignoring Rule 28) understates the outward supply and undercharges IGST. Rule 28 requires valuation at OMV, or where OMV is not ascertainable, at 90% of the retail price. The correction requires an amended tax invoice from Mumbai and a corresponding GSTR-1 amendment.

• Cash receipt of ₹2 lakh or more not flagged at ingestion. A retail store accepts ₹3 lakh in cash on a wedding purchase, splits the receipt across three invoices of ₹1 lakh each to sit below the Section 269ST cap on paper, and files three separate B2C-small entries in Table 7. The department’s data-analytics cross-check on cash intensity per customer PAN (captured under Rule 114B on the ₹3 lakh gross invoice) surfaces the split, and the penalty under Section 271DA is equal to the full ₹3 lakh cash received.

• Rule 46r QR code missing on B2C invoices at group entities above ₹500 crore turnover. The QR code trigger is a group-entity-level turnover test, not a store-level test. Stores in tier-3 markets operating under a national chain’s GSTIN sometimes issue B2C invoices without the QR code because the local POS system was not upgraded. The penalty under Rule 48(4) mirror applies via general non-compliance provisions.

• PAN capture missing on ₹2 lakh–₹5 lakh invoices paid by UPI. Rule 114B captures every invoice above ₹2 lakh regardless of payment mode; retailers who trigger PAN capture only on cash receipts miss the UPI-paid invoices in that band. The reconciliation control that surfaces this is a cross-check between invoice value and PAN capture flag at ingestion.

How a reconciliation platform handles this

Terra Insight’s reconciliation platform (TransactIG) treats every outward jewellery supply as a source event and applies a supply-type classifier stage that assigns each invoice to Table 4, Table 5, or Table 7 before the GSTR-1 aggregation runs. The classifier reads the recipient GSTIN (verified against the GSTN portal in real time), the recipient state versus the supplier state, the invoice value, and the payment-mode capture; it flags Section 269ST cash exposure above ₹2 lakh for finance review at ingestion; it attaches the Rule 46r dynamic QR code on B2C invoices for group entities above the ₹500 crore aggregate turnover threshold; and it reconciles the intra-group Table 4 outward supply from one GSTIN to the corresponding GSTR-2B inward supply on the receiving GSTIN, surfacing filing-timing lags as exceptions rather than as reconciliation losses. Retailers running the platform typically move from 51% first-pass match on the intra-group stock-transfer reconciliation to 88% first-pass match, with the residual routed to audit workflow rather than to a Section 74 exposure at year-end. The commercial pillar for the category is jewellery reconciliation software India, and the broader reconciliation software India hub anchors the cross-category architecture.

For retailers reconciling the line-item mix within a single retail invoice, the mixed-rate jewellery invoice reconciliation covers the 3% + 5% + 0.25% + 18% split. For the diamond studding classification that drives the 0.25% row within a mixed-rate invoice, see the stone-diamond studding HSN 7102/7103 article. For the wedding-purchase invoice-versus-cash decision that intersects Section 269ST and Rule 114B on the retail side, the wedding purchase GST invoice vs cash article walks the audit-defensibility posture. For the franchise-store royalty flow that adds a further supply-type layer on multi-store groups, the franchise jewellery store royalty reconciliation article covers the Section 393(1) Sl. 15 (legacy 194J) angle. For the export flow that lands in Table 6 rather than Table 4 or Table 7, see the export jewellery partial 70% realisation EEFC account FEMA article. And for the consolidated eighteen-case reference that indexes every supply classification a jewellery group encounters, the jewellery reconciliation scenarios India article is the closer.

The five FAQs below address the operational questions Indian jewellery groups ask most often when implementing structured bullion-versus-retail supply classification.

Terra Insight Editorial Team Reconciliation Infrastructure

Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →

Published 1 July 2026

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Navin Krishnan

Managing Director & Founder — Terra Insight

Ex Amazon India · Intuit QuickBooks · Tata nexarc

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