India will tax gold at a rate of 3 percent under a new nationwide sales tax that comes into effect on July 1, the government said on Saturday.

The Goods and Services Tax (GST) on gold, which was lower than industry expectations of around 5 percent, will replace a number of federal and state levies.

"Currently, the industry pays taxes around 2 to 2.5 percent, so 3 percent is almost as good as no impact,"