Walk into a jewellery store knowing only the gold rate for the day, and you might still be surprised by your final bill. Making charges, wastage, stone values, and GST can add anywhere from 15% to 40% on top of the gold cost. Here's what each line item means.
The Full Cost Breakdown
1. Gold Value
This is straightforward: weight × gold rate × purity factor.
For example: 10 grams of 22K gold at ₹7,200/gram:
10 × 7,200 × 0.916 = ₹65,952
2. Making Charges
Making charges cover the labour and skill involved in crafting the jewellery. These are the most variable part of your bill and where most of the margin sits.
Two common methods:
Percentage-based: A percentage of the gold value.
- Simple machine-made: 8–12%
- Cast jewellery: 12–18%
- Handmade/filigree: 18–35%+
Per-gram-based: A fixed charge per gram of gold.
- Machine-made: ₹250–400/gram
- Handmade: ₹600–1,200/gram+
Some brands use hybrid models. Always ask which method applies and get it in writing on the invoice.
3. Wastage
Some jewellers charge separately for wastage — the gold lost during the manufacturing process (melting, filing, shaping). Legitimate wastage exists, but it's often 1–3%. Be cautious if wastage charges exceed 5% — that's usually inflated to increase margins.
Some reputable brands include wastage in making charges and don't show it separately.
4. Stone Value
If your jewellery has diamonds, gemstones, or synthetic stones, they're priced separately from the gold. The stone price depends on:
- Quality: natural vs lab-grown, cut, colour, clarity (for diamonds)
- Certification: GIA, IGI, or uncertified
- Setting type: the more elaborate, the higher the labour
Important: Gold weight for pricing should be net weight (gold only), not gross weight (including stones). Always verify this.
5. GST
GST is 3% on (gold value + making charges + wastage). Stones may attract different GST rates depending on type. There is no GST on exchange of old gold.
Sample Calculation
| Component | Amount (₹) |
|---|
|-------------------|------------|
| Gold (10g, 22K) | 65,952 |
|---|---|
| Making charges (12%) | 7,914 |
| Wastage (2%) | 1,319 |
| GST @ 3% | 2,255 |
| Total | 77,440 |
The gold rate is ₹65,952 but you pay ₹77,440 — a 17% premium.
How to Compare Across Jewellers
- Ask for making charges as a percentage of gold value — this is the most comparable metric
- Request a detailed invoice before paying, not just the final number
- Compare on a like-for-like basis: same design complexity, same weight
- Check if stone value is based on certified stones — uncertified stones are worth much less than they're billed at
What's Non-Negotiable vs. Negotiable
Fixed: Gold rate (set daily by IBJA), GST
Negotiable: Making charges (especially on bulk purchases or festive season), wastage percentage
Don't hesitate to negotiate. Many jewellers have 15–25% flexibility on making charges for large purchases.