How Is the Price of Gold Jewellery Calculated?
The final price of jewellery is usually made up of several components:
Metal value + making charges + stone or diamond value + other disclosed charges + applicable GST
This is why the gold rate shown per gram is not the final price of a necklace, ring, chain or bangle.
Component 1: Gold rate
The gold-rate component depends on:
- Purity
- Weight
- Rate applied by the jeweller
- Date and time of purchase
A 22-carat jewellery rate should not be confused with:
- 24-carat bullion rate
- Old-gold purchase rate
- Gold-loan reference value
- International gold price
- Rate for another purity
Before comparing prices, confirm that the same purity and unit are being compared.
Component 2: Purity
Purity changes the amount of gold present in the alloy.
Common hallmark expressions include:
| Mark | Meaning |
|---|---|
| 22K916 | 22-carat; 916 fineness |
| 18K750 | 18-carat; 750 fineness |
| 14K585 | 14-carat; 585 fineness |
BIS requires purity in carat and fineness to form part of the hallmark and invoice details for hallmarked precious-metal articles.
Do not compare the per-gram price of 18-carat diamond jewellery directly with a 22-carat plain-gold piece without accounting for purity and stones.
Component 3: Net gold weight
Jewellery can contain elements other than gold, including:
- Diamonds
- Gemstones
- Beads
- Enamel
- Thread
- Other materials
The gross weight may include the complete article.
The net gold weight is the weight attributed to the precious metal.
Ask the invoice or quotation to distinguish:
- Gross weight
- Stone weight
- Net precious-metal weight
BIS says that the bill for a hallmarked article should state the net weight of the precious metal.
Component 4: Making charges
Making charges cover the work involved in turning metal into finished jewellery.
They may reflect:
- Design complexity
- Production method
- Handwork
- Setting
- Finishing
- Quality control
- Labour
- Manufacturing loss accounted for under the jeweller’s disclosed pricing policy
Making charges may be expressed as:
- A percentage
- A per-gram amount
- A fixed amount
- A combination of methods
Ask how the amount has been calculated rather than looking only at the percentage shown in promotional material.
Component 5: Diamonds and gemstones
In studded jewellery, the stone value can be a significant part of the final price.
Ask for:
- Type of stone
- Number of stones
- Total carat weight
- Diamond cut, colour and clarity where applicable
- Certification details where offered
- Whether the quoted stone weight is separate from net gold weight
- Exchange or buy-back conditions
The BIS hallmark relates to the precious-metal content. It does not replace item-specific diamond grading information.
Component 6: GST
Official GST guidance states that GST on jewellery sold to an end consumer is payable at 3% of the total transaction value, whether the making charge is shown separately or not.
Tax rules can be amended. The applicable rate and taxable value shown on the final invoice should control the actual transaction.
A simplified price structure
Assume a piece contains:
- Gold value:
A - Making charge:
B - Stone value:
C - Other disclosed taxable components:
D
Then:
Pre-tax value = A + B + C + D
The applicable GST is then calculated on the relevant transaction value according to current law.
This is an illustration—not a quotation.
Why two pieces of the same weight can cost differently
Two 20-gram necklaces may have different prices because of:
- Different purity
- Different net gold weight
- Stones or diamonds
- Design complexity
- Different making-charge structure
- Certification
- Finishing
- Brand or design-related pricing
- Applicable offers
Weight alone is not a complete comparison.
What should you ask for before paying?
Request a written quotation containing:
- Gold purity
- Gold rate and date
- Gross weight
- Net precious-metal weight
- Stone or diamond weight
- Stone or diamond value
- Making charge
- Hallmarking charge
- Other disclosed charges
- GST
- Final price
- Exchange, return and service conditions
What should the invoice contain?
For a hallmarked precious-metal article, BIS says the invoice should state:
- Article description
- Net precious-metal weight
- Purity in carat and fineness
- Hallmarking charge
The customer should retain the invoice for future verification, complaint handling and transaction records.
Jewellery buying in Mundakayam, Kottayam
When comparing jewellery in Mundakayam or elsewhere in Kottayam, do not compare only the advertised gold rate.
Compare the complete quotation:
Purity + net weight + making charges + stones + tax + after-sales conditions
Customers may contact Aladis Jewellery to request an item-specific quotation and examine the available designs in person.
Frequently asked questions
Is the daily gold rate the final jewellery price?
No. The final price can also include making charges, stones, other disclosed components and GST.
Is GST charged only on the gold value?
Official GST guidance states that 3% GST applies to the total transaction value of jewellery, whether making charges are shown separately or not.
Are making charges refundable when jewellery is sold later?
Making charges relate to manufacturing the article and generally should not be assumed to form part of its later metal value.
Should stone weight be included as gold weight?
No. Ask for net precious-metal weight to be shown separately.
What does 22K916 mean?
It denotes 22-carat gold with 916 fineness.
