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You pick a necklace. The jeweller weighs it, taps a calculator, and the number on the bill is much higher than weight times the day’s rate. Where did the extra come from? It is not a trick. A jewellery bill has four parts: the gold itself, the making charge, the tax, and sometimes stones or wastage. Once you know the order they are added in, you can estimate any quote in a minute and spot the one that does not add up.
The four parts of a jewellery bill
- 1Pure gold weightNet weight in grams × karat ÷ 24. This is the gold you are actually buying.
- 2Gold valuePure gold weight × the 24K rate per gram. That is what the metal alone is worth.
- 3Making chargeA percentage of the gold value (or a fixed amount per gram) for the craftsmanship and design.
- 4GST3% of the gold value plus the making charge. The final bill is the sum of all three.
Some jewellers quote a rate per gram for the karat directly. It works out to the same thing, because a 22K rate is the 24K rate × 22 ÷ 24.
A worked example: 10 g of 22K gold
Take a 22K chain with a net gold weight of 10 g. For a round example, say the 24K rate is ₹10,000 per gram (use the real rate from your jeweller on the day), making charge is 10 percent and GST is 3 percent.
Pure gold = 10 × 22 ÷ 24 = 9.167 g. Gold value = 9.167 × ₹10,000 = ₹91,667. Making = ₹9,167. GST = 3% × (₹91,667 + ₹9,167) = ₹3,025. All-in price per gram: ₹10,386.
The all-in price per gram is ₹10,386, which is 3.9% above the 24K rate even though the chain is only 22K. That surprises people. The making charge and tax more than cover the gap between 22K and 24K.
Karat: what 22K, 18K and 14K really mean
A karat is a 24th part. 24K is nearly pure gold. 22K means 22 parts gold and 2 parts other metals such as copper or silver, which make the piece harder and able to hold a design. In India the hallmark shows the same thing as a number: 916 for 22K, 750 for 18K and 585 for 14K, meaning parts per thousand.
| Karat | Hallmark number | Pure gold share | Pure gold in 10 g |
|---|---|---|---|
| 24K | 999 | 99.9% | 10.00 g |
| 22K | 916 | 91.6% | 9.17 g |
| 18K | 750 | 75% | 7.50 g |
| 14K | 585 | 58.5% | 5.83 g |
The calculator uses karat ÷ 24, which gives 91.67% for 22K. The hallmark standard rounds it to 91.6%. The difference is tiny.
Lower karat means less gold per gram, so a lower bill. It also means a harder piece, which is why 18K is common for studded jewellery.
Making charges: the part you can negotiate
The gold rate is the same for everyone that day. The making charge is where shops differ, and it is quoted as a percentage of the gold value or as a flat amount per gram. Simple plain chains often carry a lower rate. Detailed or machine-made designs, antique work and heavy handwork carry more. Ask for it in writing.
From 10% to 20% adds ₹9,442 to the bill. On a heavier piece the gap grows in proportion.
- Compare two shops on the same item with the same karat and weight, not on the headline rate alone.
- Ask whether “wastage” is separate. Some bills show wastage or value-added charges besides making. Add them to the making figure to compare fairly.
- Ask whether there is a fixed rate or a percent, and whether it changes with a bigger piece.
- Making charges are generally not given back when you sell the piece, so they are a cost of owning it as jewellery.
GST on gold jewellery
When you buy finished jewellery from a jeweller, GST at 3 percent applies to the total value including the making charge, even if the making charge is shown separately. On the invoice, within a state it splits into 1.5% CGST and 1.5% SGST; across states it appears as 3% IGST. That is what the calculator does: it applies the GST rate to gold value plus making.
If you sell it later: why you do not get the bill back
A jewellery bill is gold value plus making plus tax. A buyer of old gold generally pays only for the gold content at that day’s rate, often with a small deduction, and not for the making or the GST you paid. In the example, the gold was ₹91,667 of the ₹1,03,858 you paid, which means the gold price has to rise about 13 percent before you simply break even on selling the chain.
This is not a reason not to buy jewellery. Weddings, gifts and wearing it are real reasons. It is a reason to judge gold bought for investment and gold bought to wear by different yardsticks, and to see how inflation and returns compare with an FD after tax.
Before you pay: a checklist
- Look for the BIS hallmark and the six-character HUID code on the piece. It proves the karat. You can verify a hallmarked item with the BIS Care app.
- Ask for net weight. Gross weight includes stones, pearls and enamel, which are not gold. Stones are priced separately.
- Get an itemised bill with gold weight, the rate used, making charge, any stone charges, GST and the total.
- Check that the rate used is the day’s rate for that karat, and that it matches the board.
- Ask about the exchange and buyback policy before buying, including what is deducted.
- Compare two shops with the same design and weight using the same formula.
Conversions that come up: one tola is about 11.66 g, and one troy ounce, used in international prices, is 31.1035 g. If a price is quoted per 10 g, divide by 10 for the rate per gram. The unit conversion guide covers the general mix-ups, and the discount stacking guide is worth a read before you accept a “flat 50% off making charges” offer: work out what it does to the final bill, not just the making line.
Questions people ask
How is the price of gold jewellery calculated?
Pure gold weight (weight × karat ÷ 24) × the 24K rate gives the gold value. Add the making charge as a percentage of that value, then add 3 percent GST on the total. The result is the final price.
Sone ke gahane ka rate kaise nikalte hain?
Gahane ka vajan × karat ÷ 24 se shuddh sone ka vajan nikalein, use 24K ke rate se guna karein, usme making charge jodein aur phir total par 3 percent GST jodein. Jeweller ke board par jo rate likha ho wahi use karein.
What is the difference between 22K and 24K gold?
24K is almost pure gold (99.9 percent) and is soft. 22K is 91.6 percent gold mixed with other metals so that it is strong enough for jewellery. The hallmark number for 22K is 916.
How much making charge is normal on gold jewellery?
It varies by design, weight and shop. Plain chains and coins carry less, detailed or handmade pieces carry more. Ask for it in writing and compare two shops for the same item.
Is GST charged on making charges?
When you buy finished jewellery from a jeweller, 3 percent GST applies to the total value, including the making charge. A separate 5 percent applies to job work, which is labour on gold supplied for making.
Why is 10 g of 22K cheaper than 10 g of 24K?
Because 22K has only 9.17 g of pure gold in 10 g, while 24K has about 10 g. The rest of the 22K weight is other metals.
What is HUID on gold jewellery?
HUID is the six-character alphanumeric code, unique to each hallmarked piece, that goes with the BIS hallmark. It can be verified on the BIS Care app.
Do I get back the making charges if I sell my gold?
Generally no. Old gold is valued by its gold content at that day’s rate, often with a deduction. Making charges and GST are part of what you paid, not of what the gold is worth to a buyer.