Money & Tax · Part 7 · Gold · 9 min read · October 2026
Your jewellery bill has four lines. Three of them never come back.
On Dhanteras the price of gold is the one number everyone checks, and it is the one line on the bill the shop does not set. The rest — purity, weight, making, wastage, stones, GST — decides whether a ₹1.5 lakh chain is a fair bill or an expensive one, and almost all of it can be checked at the counter in five minutes.
- A jewellery bill has four lines that matter: the gold value, the making charge (often with wastage folded in), GST at 3% on both, and anything priced by weight that is not gold. Ask for each one separately before you agree a total.
- Check the rate, the purity and the weight against each other. 22 karat is 91.6% gold, so a fair 22K rate sits close to 0.916 of the day's 24K rate — and the gold rate should be charged on the net gold weight, not the gross weight with stones.
- Read the hallmark. Three marks: the BIS logo, the purity (such as 22K916), and a six-character HUID you can check in the BIS Care app. The hallmarking fee the jeweller pays rose to ₹75 an article on 14 September 2026.
- The making charge and GST do not come back. On a 10 gram 22K chain with 12% making, about 13% of the bill is gone the day you walk out — before any deduction on exchange.
Why this matters more this year
Dhanteras is the one day a year when a large share of households buy gold whether or not the price suits them. With 24 karat gold trading near ₹15,000 a gram in early October 2026, a modest 10 gram chain is a bill of around ₹1.5 lakh, and the parts of that bill that are not gold — making, wastage, stones, GST — are now large amounts of money in their own right.
None of this is about whether to buy gold. That is a family decision, and often not a financial one. This is about the bill: what each line means, which ones you can check on the spot, and which ones you will never see again.
The four lines of a jewellery bill
Here is a 10 gram 22 karat chain, priced the way most counters price it. The 24K rate is taken as ₹15,000 a gram for round numbers; use the day's rate for your own bill.
22K rate — ₹15,000 × 0.916₹13,740/g
Gold value — 10 g × ₹13,740₹1,37,400
Making charge, 12% of gold value₹16,488
GST at 3% on gold plus making₹4,617
Bill · effective ₹15,850 a gram for 22K gold₹1,58,505
Look at the last line. The chain is 91.6% gold, and it has cost you more per gram than pure 24 karat gold. That is not a scam — someone designed it, cast it and finished it, and the government taxes the sale. It is simply the price of jewellery as opposed to the price of gold, and it is worth knowing before you call jewellery an investment.
Line one: the rate and the purity
Purity in Indian hallmarking is stated in parts per thousand. The grades BIS hallmarks are:
| Karat | Fineness mark | Gold content |
|---|---|---|
| 24K | 995 | 99.5% |
| 23K | 958 | 95.8% |
| 22K | 916 | 91.6% |
| 20K | 833 | 83.3% |
| 18K | 750 | 75.0% |
| 14K | 585 | 58.5% |
| 9K | 375 | 37.5% |
9 karat was added to the hallmarking list in July 2025. Most traditional jewellery is 22K; diamond and studded pieces are usually 18K or 14K, because softer high-purity gold does not hold stones well.
The check is simple. Divide the rate on your bill by the day's 24K rate. For 22K you should land near 0.916. A jeweller whose 22K board rate is ₹13,950 when 24K is ₹15,000 is charging 0.93 — about ₹2,100 more on 10 grams before making and GST are added on top of it. Small differences are normal, since every jeweller sets their own board rate. Large ones are worth asking about.
Line two: making charges and wastage
Making charges are quoted three ways, and the same chain can look cheaper or dearer depending on which one you are shown:
- A percentage of the gold value — 12% in the example above. Rises automatically when the gold price rises.
- A rate per gram — say ₹1,200 a gram. On 10 grams that is ₹12,000, against ₹16,488 at 12%.
- A flat amount per piece — common for lighter, machine-made items.
Wastage, sometimes called "VA" or value addition, is the gold said to be lost in making the piece. Some jewellers show it as a separate percentage; many fold it into one making figure. Either way it is charged at the gold rate, so ask for the making and wastage together as one number, in rupees. That is the only form in which two shops can be compared.
This is the line where the money is. Gold value is fixed by the market and GST is fixed by law. Making is set by the shop, and on most counters it is the one line with room to move.
Line three: weight — net, not gross
On anything with stones, beads, enamel or a thread, the bill should show two weights: the gross weight of the piece and the net gold weight. The gold rate belongs on the net weight. Stones are priced separately, by their own rate or by the carat.
Charge a 12 gram piece at the gold rate when 2 grams of it are stones, and you have paid ₹27,480 for 2 grams of something that is not gold — about ₹31,700 once making and GST are applied to it. The same weight matters again on resale, because the jeweller buying it back will remove the stones and pay only for the gold.
Line four: GST at 3%
Gold jewellery carries GST at 3%. When you buy a finished piece, the making charge is part of the same supply, so the 3% applies to the gold value and the making charge together. (The 5% rate you may have heard of applies to job work — when you hand your own gold to a goldsmith and pay only for the making.)
One point is genuinely unsettled: on an exchange, whether GST should be charged on the new piece's full price or only on the difference you pay in cash. The trade itself argues about it, and many bills charge it on the full price. On the chain above, with 5 grams of old 22K gold handed in, the two methods differ by about ₹2,060. Ask which way the bill is worked out before you agree to it.
The hallmark, and how to check it at the counter
A hallmarked piece carries three marks: the BIS logo, the purity as karat and fineness (for example 22K916), and a six-character alphanumeric HUID — the hallmark unique identification number. Each HUID belongs to one article.
- Check the HUID in the BIS Care app using its Verify HUID feature. It should return the jeweller's registration, the purity and the type of article. If what the app shows does not match what is on the counter, do not buy it.
- Make sure the HUID is on the bill. It ties the purity claim to this exact piece.
- A hallmarked piece can be tested for purity at a BIS-recognised Assaying and Hallmarking Centre for a fee, if you ever doubt it.
Hallmarking became compulsory in notified districts from 2021 and the list has grown in phases since. Wherever you buy, insist on it.
On cost: BIS raised the fee that jewellers pay the hallmarking centres to ₹75 per gold article, plus taxes, from 14 September 2026. It used to be ₹45. Whether any of that reaches your bill is up to the jeweller — but if a bill shows "hallmarking" at several hundred rupees a piece, that is not BIS's fee.
The tool for this
Enter the day's rate, the weight, the karat, the making charge in whichever form you were quoted, and any stones. It rebuilds the bill line by line, shows the effective price per gram, and what the same piece fetches on exchange.
What comes back on exchange
Walk back into the shop the next morning and ask what the chain is worth. At best, the jeweller pays the 22K rate on the net gold weight: ₹1,37,400. The ₹16,488 making charge and the ₹4,617 GST are gone — ₹21,105, or about 13% of what you paid, before the jeweller applies any deduction of its own for melting or testing.
Exchange policies differ widely. Some jewellers pay close to the full rate on their own hallmarked pieces and less on others; some deduct a percentage for melting loss; some pay more if you buy new jewellery rather than take cash. Ask for the exchange or buy-back terms in writing at the time you buy, while you are a customer they want, not when you are a seller they do not.
And one tax point people rarely connect: in tax law an exchange is a sale. Old jewellery held for more than 24 months gives a long-term capital gain taxed at 12.5% without indexation; held for less, the gain is taxed at your slab rate. On inherited family jewellery bought decades ago, the gain can be most of the value.
Paying for it
- Cash is capped. Section 186 of the Income-tax Act, 2025 bars anyone from receiving ₹2,00,000 or more in cash for a single transaction. A jeweller cannot take that much in cash from you for one bill, and splitting the bill to get around it is the kind of thing the rule was written for.
- Card EMIs on jewellery carry the same costs as any card EMI — a processing fee, GST on the interest and the fee, and a blocked credit limit. The credit card EMI piece works through what "convert to EMI" really costs.
- Gold saving schemes run by jewellers, where you pay monthly and the shop adds an instalment, are worth reading carefully: the benefit usually comes as a discount on making charges, and it can only be used at that shop.
The questions to ask before you pay
- What is your 22K (or 18K) rate today, and what is today's 24K rate?
- What is the net gold weight, separately from the gross weight?
- What are making and wastage together, in rupees?
- How are stones priced, and are they in the gold weight?
- Is GST on the full price or on the net after my old gold?
- Is the HUID on the bill, and does it match the app?
- What will you pay me for this piece if I bring it back, and can I have that in writing?
The one-line summary
A jewellery bill is gold value plus three things that do not come back. Check the rate against purity, the weight against the stones, and the HUID against the app — and ask for making and wastage in rupees, because that is the one line on the bill that the shop decides.
Written at the MoneyClarityTech desk — by a working retail-credit professional in Indian banking who reads loan files, credit reports and bank statements every working day. Patterns from hundreds of real cases; every identifying detail removed. More about MoneyClarityTech →