You check the gold rate today, see 22K at around 1,40,000 per 10 grams, walk into a shop for a 10-gram chain, and the bill says 1,72,000. Nothing dishonest has happened. The rate you read is the metal rate — what the gold itself is worth — and four separate things get added to it.
1. Making charges (the karigar's labour)
Someone turned raw gold into a chain. Making charges pay for that work and for the shop's margin on it. They are quoted one of two ways:
- As a percentage of the metal value — typically 8-14% for machine-made chains and lightweight daily wear, 15-25% for handmade sets, and 25-35% for intricate antique, temple or kundan work.
- As a flat rate per gram — often 300 to 800 rupees a gram, common for plain items where the work per gram is predictable.
Machine-made is cheaper because a machine made it. A heavy handmade bridal set carries more labour per gram than a mass-produced chain, and the charge reflects that. Ask which method is being used before you ask for a discount, because 12% and 400 rupees a gram are very different numbers on the same piece.
2. Wastage, or ghat
This is the one most people miss, because it is often quoted alongside making and sounds like part of it. Wastage covers the gold genuinely lost in cutting, filing and polishing — and, in practice, a margin on top. It is charged as a percentage of the metal weight, usually 2-10% depending on the piece.
Wastage and making are two separate charges. A quote of "10% making" with 6% wastage quietly attached is a 16% add-on. Ask for both numbers.
3. Stone value
If the piece carries diamonds, kundan or coloured stones, those are priced separately — and crucially, the stones' weight should be deducted from the gold weight you are charged for. You should not be paying the gold rate on the weight of a ruby. Ask for the net gold weight and the stone weight as separate lines.
4. GST
Gold jewellery attracts 3% GST on the invoice value. When making charges are billed separately as a service they are taxed at 5%; when the whole ornament is billed as one composite supply, 3% applies to the total. Either way it is on the bill, not hidden in the rate.
A worked example
A 10-gram 22K chain, with 22K at 1,40,000 per 10 grams:
- Metal value: 1,40,000
- Wastage at 5%: 7,000
- Making at 12% of metal: 16,800
- Subtotal: 1,63,800
- GST at 3%: 4,914
- Total: 1,68,714
That is 20% above the rate you read online, and every rupee of it is explainable. A bill you cannot reconstruct like this is a bill to question.
What is negotiable, and what is not
The metal rate is not negotiable — it comes from the bullion market and every shop in your town is working from the same board. GST is not negotiable either.
Making and wastage are. That is where shops compete, and where the difference between two quotes on the same day almost always sits. If one jeweller is 4,000 cheaper than another on an identical chain, it is not because his gold is cheaper.
The one thing to remember when selling
You never get making charges back. When you sell or exchange, you are paid for the metal at the fine-gold rate adjusted for tested purity — the labour you paid for is gone. This is why heavy, high-making pieces are poor investments and coins or bars are better ones, and why the choice between 22K and 24K matters more than most buyers realise.
What to ask for on the bill
A proper tax invoice shows: gross weight, stone weight, net gold weight, purity, the metal rate applied, making charges, wastage, stone value, hallmarking charge and GST — each on its own line, with the BIS hallmark and HUID for every hallmarked piece. If you are handed one lump sum, ask for the breakup. You are entitled to it, and any jeweller running proper billing software can print it in seconds.