How the bill is built up
A jewellery bill has four layers, and only the first is the gold itself:
- Metal value = weight × rate for that purity
- Making charges — either a percentage of metal value or a fixed amount per gram
- GST — currently 3% on gold, charged on metal plus making
- Hallmarking charge — a small fixed fee per piece
Making charges are where bills vary most between shops, and they are the most negotiable component.
Purity — what the karat means
| Karat | Purity | Hallmark | Typical use |
|---|---|---|---|
| 24K | 99.9% | 999 | Coins and bars — too soft for jewellery |
| 22K | 91.6% | 916 | Traditional Indian jewellery |
| 18K | 75.0% | 750 | Studded and modern designs |
| 14K | 58.5% | 585 | Lightweight everyday pieces |
If 24K gold is ₹7,500 per gram, then 22K is about ₹6,870 (91.6%) and 18K about ₹5,625 (75%). A shop quoting the 24K rate for 22K jewellery is overcharging.
Worked example
A 22K necklace weighing 20 grams, with 22K at ₹6,870/gram and 12% making charges:
| Component | Working | Amount |
|---|---|---|
| Metal value | 20 × 6,870 | ₹1,37,400 |
| Making charges | 12% | ₹16,488 |
| Subtotal | — | ₹1,53,888 |
| GST at 3% | — | ₹4,617 |
| Total | — | ₹1,58,505 |
Making charges plus GST add ₹21,105 — about 15% above the metal value. On resale you generally recover the metal value only, so that 15% is effectively gone the moment you buy.
Buying gold sensibly
Negotiating
- Making charges typically run 8–25%. They are negotiable, especially on plain gold and during festival offers.
- Machine-made and plain designs carry lower making charges than intricate handmade work.
- Ask for the rate, weight, purity, making charge and GST as separate line items. A single lump-sum quote hides where the money goes.
- For studded jewellery, ask how stone weight is being treated — you should not pay the gold rate on stones.
If you're buying gold as an investment rather than to wear
Jewellery is a poor investment vehicle because of making charges and resale deductions. Sovereign Gold Bonds, gold ETFs and digital gold avoid that loss entirely and are worth comparing before you buy metal for investment purposes.
Common mistakes
- Paying the 24K rate for 22K jewellery.
- Accepting making charges without asking.
- Not checking the HUID on the BIS Care app.
- Assuming resale recovers making charges. It rarely does.
- Buying jewellery when the goal is investment.
Frequently Asked Questions
How is gold jewellery price calculated?
Weight multiplied by the rate for that purity, plus making charges, plus 3% GST on the total, plus a small hallmarking fee.
What is the difference between 22K and 24K gold?
24K is 99.9% pure and too soft for jewellery. 22K is 91.6% pure, mixed with other metals for durability, and is the standard for Indian jewellery.
What are making charges?
The jeweller's fee for crafting the piece, typically 8–25% of metal value or a fixed amount per gram. They are negotiable and are not recovered on resale.
How much GST is charged on gold?
Currently 3%, applied to the metal value plus making charges. Rates are set by the GST Council and can change.
What is HUID?
A six-digit alphanumeric Hallmark Unique Identification code stamped on hallmarked jewellery. You can verify it on the BIS Care app before paying.
Will I get making charges back when I sell?
Generally no. Resale usually pays only the metal value for the purity, which is why jewellery is a poor investment vehicle.
Is jewellery a good way to invest in gold?
Not really. Making charges and resale deductions cost you a significant share upfront. Sovereign Gold Bonds and gold ETFs avoid that.
Why does gold price differ between cities?
Local taxes, transport costs and dealer margins vary, so rates differ slightly across Indian cities.
Related calculators and guides
Official sources: Bureau of Indian Standards
Disclaimer. This calculator provides estimates for general guidance only and is not financial, tax or legal advice. Rates, rules and limits change, and your own situation may differ. Please verify current figures with the relevant authority or a qualified professional before acting on them.