When comparing a gold rate with a jewellery price, it is important not to treat the two numbers as interchangeable. A reference gold rate helps estimate the underlying gold-content value, while a retail jewellery price can contain additional components.
Keep each component visible
Separating gold-content value, making charges and applicable tax makes a jewellery estimate easier to understand and compare.
What are making charges?
Making charges are a commercial price component associated with turning gold into a finished jewellery item. They are separate from the underlying gold-content value.
A percentage of a chosen gold value
For example, if a seller quotes a 10% making charge on a ₹1,00,000 base, the making charge would be ₹10,000.
A quoted amount for each gram
If the quoted making charge is ₹500 per gram for a 20g item, the making-charge component would be ₹10,000.
From gold value to an estimated jewellery cost
Gold-content value
Estimate the value represented by weight, purity and the reference gold rate.
Making charge
Add the quoted making-charge amount using the relevant pricing method.
Applicable tax
Apply the appropriate tax treatment to the relevant taxable amount.
Understanding a percentage-based making charge
Assume a hypothetical gold-content value of ₹1,00,000.
If the quoted making charge is 10%: ₹1,00,000 × 10% = ₹10,000.
The amount before considering applicable tax would therefore be ₹1,10,000.
The example stops before tax because the applicable taxable base and rate should be determined from the actual transaction rather than assumed universally.
How should GST be treated in an estimate?
Tax calculations should identify both the taxable amount and the tax rate being used. Those inputs should remain visible instead of being hidden behind an assumption that every gold-related transaction has identical treatment.
Gold Ledger's GST calculator therefore lets you enter a taxable amount and rate explicitly. It is a calculation tool, not tax advice or a determination of which tax treatment applies to a particular purchase.
Open GST CalculatorWhat to compare on a jewellery quote
The weight and purity used for the gold component.
The gold rate used by the seller for the calculation.
Whether making charges are percentage-based, per gram or quoted using another method.
The taxable amount, applicable tax rate and any other separately disclosed components.
If you first need to understand the underlying gold component, read How Gold Value Is Calculated.
Frequently asked questions
What is a making charge on gold jewellery?
A making charge is a price component associated with producing or crafting jewellery. A seller may express it as a percentage, a per-gram amount or another quoted pricing structure.
Are making charges always calculated as a percentage?
No. Percentage-based making charges are common, but a seller can quote making charges using a per-gram method or another commercial pricing structure.
Is GST calculated only on the gold value?
The taxable base and applicable tax treatment depend on the transaction and current rules. Gold Ledger's GST calculator therefore lets you enter the taxable amount and tax rate explicitly rather than assuming every transaction is identical.
Can the final jewellery price be higher than the gold-content value?
Yes. Gold-content value represents only one part of a jewellery price. Making charges, applicable taxes and other seller-specific components can increase the final amount.