How to Calculate Gold Jewellery Price in India: Making Charges, GST and Hallmark
The gold rate you see online is not the price you pay at the shop. A jewellery bill adds making charges and tax on top of the value of the gold itself. Two shops can quote the same rate and still give very different totals. This guide shows how the bill is built, how to compare quotes fairly and what to check before you buy.
Gold purity: 24K, 22K and 18K
24K gold is about 99.9% pure and is usually used for coins and bars. 22K gold is about 91.67% pure and is the usual choice for jewellery in India. 18K gold is 75% pure and is common in stone-studded designs. Hallmarks for these grades are 999, 916 and 750. A rate quoted for one purity is not comparable to another, so always check which purity a quote refers to.
How the bill is calculated
- Gold value = weight in grams × rate per gram for that purity.
- Making charges = a percentage of the gold value (or a fixed amount per gram), depending on the shop and design. In Tamil Nadu, jewellers may quote this as seykooli and wastage as sedharam.
- GST is added on top. GST on gold jewellery is currently charged at 3% of the value including making charges. Confirm the exact tax lines on your invoice.
- Total = gold value + making charges + GST.
A worked example
Using an illustrative rate (not today’s price): 8 grams of 22K gold at ₹13,000 per gram, with 10% making charges and 3% GST.
| Gold value (8 g × ₹13,000) | ₹1,04,000 |
| Making charges at 10% | ₹10,400 |
| Subtotal | ₹1,14,400 |
| GST at 3% | ₹3,432 |
| Total | ₹1,17,832 |
Eight grams is one sovereign (pavun), the unit widely used in Tamil Nadu. The Gold Rate Today page has a calculator that does this with the latest saved rate.
Comparing two jewellers fairly
A lower rate does not always mean a lower bill. Suppose Shop A quotes ₹13,000 per gram with 8% making charges, and Shop B quotes ₹13,050 per gram with 6% making charges, both for 8 grams of 22K with 3% GST.
| Shop A | Shop B | |
|---|---|---|
| Gold value | ₹1,04,000 | ₹1,04,400 |
| Making charges | ₹8,320 | ₹6,264 |
| GST at 3% | ₹3,369.60 | ₹3,319.92 |
| Total | ₹1,15,689.60 | ₹1,13,983.92 |
Shop B has the higher per-gram rate but is cheaper by about ₹1,700 because its making charges are lower. Always compare the final total for the same item.
What to check before you buy
- Ask for an itemised bill that shows weight, rate, making charges and GST separately.
- Look for the BIS hallmark with a six-digit HUID on the jewellery, and ask how to verify it.
- For stone-studded pieces, ask that the stone weight is deducted from the gold weight and priced separately.
- Ask about exchange and buyback terms and any deductions that apply.
- Compare quotes for the same purity on the same day.
About the daily gold rate
Gold rates change through the day, and retail rates vary by city because of local demand, dealer premiums and taxes. The rates published online are indicative. Use them to understand the market and to check whether a quote is reasonable, and confirm the actual rate with the jeweller when you buy. Nothing here is investment advice.
Frequently asked questions
What is one sovereign of gold?
One sovereign (pavun) is 8 grams.
Why is the shop price higher than the gold rate online?
The bill adds making charges and GST to the gold value, and shop rates may include local premiums.
Is making charge fixed?
No. It varies by shop and by design. Some quote a percentage of the gold value and others a fixed amount per gram, so compare the final total.
Does GST apply to making charges?
On a jewellery sale the GST is generally charged on the value including making charges. Check the tax lines on your invoice or ask your accountant.
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Please note: This article is general information for learning and planning. Rates, rules and taxes can change, and examples use illustrative numbers. It is not tax, legal or investment advice, so please check official sources or speak to a qualified professional before you decide.
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