Gold Making Charges & GST, Explained
The gold rate is only the starting point. When you buy jewellery in India, two extras — making charges and GST — sit on top of the metal cost and can add 10–25% to the bill. Here’s exactly how they work, with a worked example.
Last updated: July 2026 · about a 6-minute read
The three parts of a gold jewellery bill
Almost every gold jewellery invoice breaks down into three components:
- Metal value — the weight of the piece × the per-gram rate for its karat.
- Making charges — the jeweller’s fee for crafting the piece (labour, design, finishing).
- GST — Goods and Services Tax, charged on the total of the two above.
Understanding each one is the difference between comparing shops fairly and being surprised at the counter.
1. Metal value
This is the straightforward part: the day’s rate for the karat you’re buying, multiplied by the weight in grams. If 22K gold is ₹6,400/g and your necklace weighs 20g, the metal value is ₹1,28,000. You can check the live 22K rate on our gold rate page and try weights on the calculator.
2. Making charges — the part that varies most
Making charges (also called “making” or “wastage + making”) are what the jeweller charges to turn raw gold into a finished piece. This is where quotes differ wildly between shops, and where there’s room to negotiate. They’re quoted in one of two ways:
Per-gram making charges
A flat rupee amount per gram — e.g. ₹500/g. On a 20g piece that’s ₹10,000. Simple machine-made or plain pieces often use this method.
Percentage making charges
A percentage of the metal value — e.g. 12%. On ₹1,28,000 of gold that’s ₹15,360. Intricate, hand-crafted or designer pieces usually use a percentage, and it can climb to 20–25% for elaborate work.
3. GST on gold
GST in India applies to gold jewellery in two parts, but in practice it’s charged on the combined value:
- 3% GST on the value of the gold itself.
- 5% GST on the making charges.
Many invoices simplify this by applying 3% to the metal-plus-making total; the exact split can vary by jeweller and how they itemise the bill. Either way, GST is a pass-through tax — the jeweller collects it and remits it to the government; it isn’t their margin.
A worked example
Let’s price a 20g 22K gold necklace on a day when 22K is ₹6,400/g, with 12% making charges:
| Component | Calculation | Amount |
|---|---|---|
| Metal value | 20g × ₹6,400 | ₹1,28,000 |
| Making charges | 12% × ₹1,28,000 | ₹15,360 |
| Subtotal | — | ₹1,43,360 |
| GST (3%) | 3% × ₹1,43,360 | ₹4,301 |
| Total | — | ₹1,47,661 |
So a piece whose “gold value” is ₹1,28,000 actually costs about ₹1,47,661 — roughly 15% more than the metal alone. That gap is exactly why comparing only the advertised gold rate between two shops can be misleading.
How to keep your bill down
- Negotiate the making charge. The metal rate and GST are effectively fixed; making charges are not. This is your main lever.
- Prefer plain over heavily worked designs if budget matters — intricate work carries higher making charges.
- Ask for an itemised bill showing metal, making and GST separately. Refuse vague “all-in” quotes.
- Watch for “wastage” added on top of making — question any double charge.
- Compare final totals, not rates. Use the gold calculator to estimate before you shop.
What about buying coins or bars?
Investment gold — coins and bars — carries much lower making charges (often a small flat fee) because there’s little craftsmanship involved. The 3% GST still applies. This is one reason coins/bars are closer to the pure gold rate than jewellery, and tend to give better value if your goal is investment rather than adornment. (See 22K vs 24K for more on investment vs jewellery gold.)
Quick recap
- Final price = metal value + making charges + GST.
- Making charges (per-gram or %) vary most and are negotiable.
- GST adds ~3% on the metal-plus-making total.
- Expect the total to run 10–25% above the bare gold value.