If you’re planning to buy gold jewellery in India, it’s important to understand how its value is calculated. Although the price of gold jewellery is generally higher than the current gold rate in the market, a few factors, such as GST, Making charges and other changes, influence the final bill amount.
Recently, gold rates in India have hit new highs. For example, the price of 24-carat gold per 10 grams has crossed Rs. 73,000. As a result, the cost of jewellery has also increased. To ensure that you’re not overpaying, it’s essential to know the different charges that jewellers add to the price of gold.
When determining the value of gold jewellery, jewellers consider the gold price, making charges, hallmarking charges, GST, and any diamonds or gems used. Making charges or wastage charges are added to the cost of gold and can vary from shop to shop. Usually, making charges range from 1% to 10% per 10 grams.
To calculate the final price of gold jewellery, you can use the following formula:
Final Price of Gold Jewelry = (Price of Gold X Weight of Gold in Grams) + Making Charges + GST (3%) + Hallmarking Charges. It’s important to note that the purity of gold is measured in carats. Most jewellery is made of 22-carat gold, as 24-carat gold is too soft to create jewellery. The higher the carat, the more expensive the gold. For instance, 14-carat gold is less costly than 24-carat gold.
Gold rates vary by region, shop, and local tax rates. This means that you should shop around before making a purchase, particularly if you’re buying jewellery in bulk. So, let’s say a jeweller has reduced the price of 22-carat gold to Rs. 65,000. If you’re purchasing an 11-gram chain, then the making charges per gram will be around Rs. 500 each. Additionally, GST (3%) will be levied on both the gold price and the manufacturing charges.
The current rate of 10 grams of gold is Rs. 65,000 per gram, which means that the price per 11-gram chain will be Rs. 71,500. The making charges on this 11-gram chain would be Rs. 5,500, bringing the total cost to Rs. 77,000. Adding 3% GST to this amount gives a total of Rs. 79,310. Additionally, hallmarking charges of Rs. 45 will be applied. Therefore, the final cost of an 11-gram gold chain would be Rs. 79,355.
It’s important to note that gold jewellers sell their products along with making charges, GST, and hallmarking charges. As of now, the price of 10 grams of 22-carat gold in Hyderabad’s market is Rs. 66,050.
