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For a consumer buying finished gold jewellery in India, GST is 3% of the total transaction value—not 3% on the gold value plus a separate 5% on making charges. The total normally starts with the seller’s stated metal value, then adds making and other disclosed charges, subtracts any discount or exchange credit actually shown on the invoice, and applies the GST treatment stated there. Making charges themselves have no market-wide percentage set by the official guidance, so the quoted amount and calculation method matter as much as the gold rate.
What you actually pay for in a jewellery quote
A finished ornament price combines several different elements. Separating them lets you compare two quotes that may look similar at first glance.
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Gold or metal value
The seller calculates the precious-metal component from the article’s net precious-metal weight, its purity and the gold rate used for that quote. An ornament with stones may have a gross weight that includes non-gold material, so the net gold weight is the figure that should be identifiable. Official guidance does not prescribe one consumer-facing daily rate or a universal jeweller convention. Ask which rate, purity basis and weight the seller used, and keep that explanation with the written quote.
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This is the seller’s charge for designing and producing the item. It can be a flat amount or a rate applied to a stated base, such as the metal value. No official source establishes a market-wide “reasonable” percentage, and there is no single rate that all jewellers must use. Compare the actual rupee amount and the method of calculation rather than relying on a percentage advertised without its base.
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Hallmarking charge
For a hallmarked precious-metal article, BIS treats hallmarking as separate from making and wastage charges. If the seller collects it, the amount should appear as its own line or otherwise be identifiable in the invoice. A hallmarking charge does not explain, replace or include the making charge.
Other charges, credits and discounts
Stone prices, wastage, design or finishing charges, exchange credits and discounts are seller-specific invoice items. The official material does not establish one formula for every combination. The signed quote and final tax invoice control what was actually charged and deducted.
How GST is applied to a consumer sale
CBIC’s sectoral FAQ answers the specific question of whether a jeweller may charge 3% on the total value or 3% on gold value plus 5% on making charges: “GST is payable at the rate of 3% of the total transaction value of jewellery, whether the making charge is shown separately or not.” That is the rule for a customer buying finished jewellery from the seller.
Intra-state and inter-state components
CBIC’s rate schedule places precious-metal jewellery under tariff heading 7113. For an intra-state transaction, the 3% is split into 1.5% CGST and 1.5% SGST or UTGST. For an inter-state supply, the schedule lists 3% IGST. Your invoice should identify the applicable tax type and amounts.
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The 5% figure is a different transaction
The same CBIC FAQ describes 5% GST on job charges when a registered job worker receives gold as raw material from a principal and returns finished goods. That is a business-to-business job-work service context. It is not the calculation CBIC gives for a consumer purchasing completed jewellery. A salesperson should not use the job-work rate to split your retail purchase into 3% on gold and 5% on making.
A transparent calculation method
Use the invoice rather than an assumed industry formula. A practical worksheet is:
- Identify the net precious-metal weight, purity and the seller’s stated metal rate.
- Verify the resulting metal value.
- Add the making charge and every other disclosed charge, including a separately listed hallmarking charge where applicable.
- Subtract only discounts or exchange credits actually applied on the written quote or invoice.
- Apply the GST treatment shown for the consumer transaction. Under CBIC’s guidance, finished jewellery is taxed at 3% of the total transaction value, whether making is separately itemized or not.
- Add the GST to obtain the amount payable, checking that rounding agrees with the invoice.
In symbols, before-tax transaction value is the stated metal value plus disclosed charges minus the discounts or credits actually allowed. GST is then calculated on the taxable transaction value shown by the seller. The invoice is the controlling record when stones, exchanges, promotions or unusual adjustments are involved.
Worked example with hypothetical numbers
The following illustration uses invented figures solely to show the arithmetic; it is not a current gold-price quotation or a benchmark for making charges.
| Line item | Hypothetical amount |
|---|---|
| Net gold weight and quoted metal value | ₹60,000 |
| Making charge (flat amount) | ₹8,000 |
| Hallmarking charge | ₹45 |
| Other disclosed charge | ₹500 |
| Discount shown on invoice | −₹2,000 |
| Transaction value before GST | ₹66,545 |
| GST at 3% | ₹1,996.35 |
| Final amount | ₹68,541.35 |
If this were an intra-state sale, the 3% tax would ordinarily appear as 1.5% CGST and 1.5% SGST/UTGST; on these hypothetical figures that is ₹998.18 for each component before any invoice rounding. An inter-state invoice would show 3% IGST instead. Actual system rounding and the seller’s treatment of a particular discount can affect the displayed paise.
When making is quoted as a percentage
Suppose the same seller says making is 10% of a ₹60,000 metal value. The making charge would be ₹6,000, not an automatically accepted industry standard. Replace the ₹8,000 line in the worksheet with ₹6,000 and recompute the transaction value and 3% GST. Ask the seller to state the percentage base: a percentage of metal value, weight-based amount or another base produces different results.
How to compare two jewellers without being misled
Compare like with like. A lower making percentage can still produce a higher rupee charge if it is applied to a larger base, and a quote that omits hallmarking or stone costs is not necessarily cheaper.
- Match purity and net precious-metal weight before comparing metal values.
- Confirm that both quotes use the same kind of gold rate and the same time or date.
- Convert every making quote to a rupee amount and record whether it is flat, per gram or percentage-based.
- List stones, wastage, finishing and other charges separately rather than accepting one unexplained “additional” line.
- Check whether a discount is an actual deduction or merely a promotional label.
- Compare the pre-tax transaction value, GST and final payable amount as separate columns.
| Check | Question to ask |
|---|---|
| Weight | What are the gross weight and net precious-metal weight? |
| Purity | Which carat and fineness are being billed? |
| Rate | What gold rate and calculation method produced the metal value? |
| Making | Is the charge flat, per gram or a percentage, and what is its base? |
| Extras | Are stones, wastage, hallmarking and other charges separately identified? |
| Credits | What discount or exchange amount is actually deducted? |
| Tax | What taxable value, GST rate and CGST/SGST or IGST amounts appear? |
Hallmark and invoice checks before payment
BIS consumer guidance says the bill or invoice for a hallmarked precious-metal article should state the description of each article, net precious-metal weight, purity in carat and fineness, and hallmarking charges. Request an authentic invoice and make sure those particulars relate to the item you are taking home.
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Inspect the hallmark
BIS says a gold hallmark consists of the BIS logo, the purity in caratage and fineness, and a six-digit alphanumeric Hallmark Unique Identification (HUID) number. You can verify the HUID in the BIS Care app. The HUID check does not replace checking the invoice: the article and its documented weight and purity still need to match.
Keep the paperwork
Retain the itemised quote, final invoice, payment record and any exchange or buyback document. They provide the evidence needed if the delivered weight, purity, discount or tax differs from what was agreed.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Common mistakes and how to correct them
Assuming GST applies only to gold
A seller may show metal and making on separate lines, but CBIC’s consumer-sale answer still places GST at 3% of the total transaction value. Ask the seller to show the taxable value and the applicable tax components on the invoice.
Confusing job work with retail purchase
The 5% job-charge treatment applies to the specified registered job-work arrangement in which a principal supplies raw gold. It is not a second rate to add to a consumer’s finished-jewellery purchase. Ask which transaction type the invoice represents if someone quotes 5%.
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Treating a making-charge percentage as a legal norm
There is no official market-wide percentage in the guidance covered here. Negotiate and compare the actual charge, its base and the resulting rupee amount.
Using gross weight for a stone-set item
Gross weight can include stones or other non-gold material. Require the net precious-metal weight and purity used in the metal-value calculation.
Accepting an unexplained discount
Only a discount or exchange credit that is actually recorded and deducted changes the amount you pay. Have the seller rewrite the quote if the promised reduction is missing from the invoice.
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Leaving without an itemised invoice
If the bill does not identify the article, net metal weight, purity, fineness and applicable hallmarking charge, request a corrected invoice before completing payment. An incomplete bill makes later verification and dispute resolution harder.
Questions to ask at the counter
- What are the net gold weight, carat and fineness?
- Which rate and formula generated the metal value?
- How is the making charge calculated, and what is the rupee amount?
- Which charges are for stones, wastage, finishing or hallmarking?
- What discount or exchange credit is being deducted now?
- What is the taxable transaction value and why is the invoice showing CGST/SGST or IGST?
- Does the HUID on the article verify in the BIS Care app?
These answers let you judge the offer on its real economics: metal value, workmanship, extras and tax, rather than on a headline making-charge percentage.
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