Gold Chain Bill vs Gold Rate: Where the Extra ₹18,000 Goes

Why does a 10 g gold chain come with a bill of ₹1,53,352 when the gold in it is worth ₹1,35,350? Short answer: a jewellery bill has more layers than the gold rate. In our example, making and wastage charges add ₹13,535, and 3% GST on the whole amount adds ₹4,467. That is about ₹18,000 extra, and none of it is the hallmark, because the BIS hallmarking fee is only ₹45 per piece plus taxes. The catch comes later: if you sell the chain back, you get the gold's value, not the bill, so the gold rate has to rise about 13.3% before you are back to what you paid.

The gold rate is only the first layer

The rate you see in the news is the price of the metal. The figure we use here, ₹1,35,350 for 10 g of 22K gold, was the Mumbai rate reported on 18 October 2026. The same report listed ₹1,35,500 for Delhi that day and called its numbers indicative retail rates that leave out GST and making charges. So rates differ by city and by day, and a finished piece will always bill higher than the headline rate.

A chain bill is built in layers:

1. Gold value: weight multiplied by the day's rate for the purity (22K here).
2. Making and wastage: what the jeweller charges to craft the piece and for gold lost while crafting it.
3. GST: 3% on the invoice value, not only on the gold.
4. Hallmarking: a small BIS fee per piece.

Layer 2: making charges and wastage

Making charges pay for designing and crafting the jewellery. Wastage covers the gold lost when a piece is cut, shaped and polished. One guide says making charges in India range from 3% to 25%, and that wastage is usually 5% to 7% of the gold weight, sometimes higher for complex designs. Another says plain machine-made chains sit at the low end, with a making charge of 3% to 8%, because chain-weaving machines need little manual work.

Some jewellers quote one combined number, others quote making and wastage separately. That is why the first question is always for the total. For our example we assume 10% for making and wastage together, charged on the gold value. This is an assumption, not a standard rate. Your jeweller may charge less or more.

Layer 3: GST on the whole invoice

For a finished piece sold by a jeweller, GST is 3% on the full invoice: gold value plus making charges (and stones, if any). That is why the GST in our example, ₹4,467, is more than 3% of the gold alone, which would be about ₹4,060. The extra ₹406 or so is GST on the making and wastage. Section 8 of the CGST Act sets the rule that a composite supply is taxed at the rate of its principal supply, which fits with the gold's 3% applying to the combined amount.

You may see a different split on some invoices. The same guide says standalone job work, where you pay only for the making, attracts 5% on the making charge alone. Some jewellers also show 5% GST on making as a separate line; in our example, that would add about ₹270. We could not confirm which treatment applies to every purchase, so ask how GST is calculated on your invoice.

The hallmark is not the culprit

The BIS hallmarking fee is ₹45 per gold article. It does not include making or wastage charges, and taxes are extra. It was raised from ₹35 to ₹45 in March 2022, so older pages may still show the old figure. Against a ₹1,53,352 bill, ₹45 is about 0.03%. A hallmark matters for another reason: it gives the piece a HUID, and you can verify that HUID on the BIS Care app.

Worked example: the full bill

Assumptions: a 10 g chain in 22K gold, the Mumbai rate above, making plus wastage at 10% of the gold value, and 3% GST on the total of the two. We leave out the ₹45 hallmark fee, which would not change the picture.

What you get if you sell it back

A jeweller who buys back old gold works from the net weight of the gold at the day's rate. Making charges are generally not refunded, and neither is the GST. Deductions for melting loss and a purity check are possible too, and the guide we checked gives no percentages for them. Every jeweller has its own buyback and exchange policy, so there is no universal number.

Even in the best case, with the rate unchanged and no deduction at all, you would get back ₹1,35,350. That is ₹18,002 less than you paid, about 11.7% of the bill. To break even, the gold rate must rise until 10 g of 22K gold is worth the full ₹1,53,352. That is a rise of 13.3%, and every deduction pushes the number higher. A quick way to estimate it: multiply (1 + making and wastage %) by 1.03 and subtract 1.

Our own calculation on the same ₹1,35,350 rate, with 3% GST, assuming the jeweller pays the full gold value with no deductions. Real buybacks may pay less.

Who this affects

If you buy a chain to wear or to gift, the extra is the price of the craft. The numbers matter most if you buy jewellery partly as savings, for example in the festive season. Then making, wastage and GST are costs the gold price must first recover before you are even. Complex designs can carry higher wastage, so the gap may be wider than for a plain chain.

Common mistakes

• Comparing shops only on the per-gram rate. Compare final bills for the same weight and purity.
• Asking about making charges but not wastage. Ask for both, or for one combined percentage.
• Treating the bill as the value of the gold. On resale, the value is the gold's weight at the day's rate, less any deductions.
• Relying on the stamp alone. Verify the HUID on the BIS Care app.

What you can do before buying

1. Ask for making and wastage as a percentage and in rupees, and whether they are separate or combined.
2. Ask for an itemised bill: weight, purity, rate, making, wastage and GST.
3. Get the buyback policy in writing, including how deductions for melting loss and purity checks are calculated.
4. Check the HUID on the BIS Care app before you pay.
5. Work out your break-even with the formula above, and decide whether you are buying to wear or to save.

Key takeaways

• The gold rate is the first layer of the bill. Making, wastage and 3% GST sit on top, and together added ₹18,002 in our example.
• The hallmark fee is ₹45 per piece plus taxes. It is not the reason the bill is higher.
• On resale, making charges and GST are generally not refunded, and melting or purity deductions may apply.
• With 10% making and wastage, the gold rate needs to rise about 13.3% to break even, even with no deductions.
• Before buying, ask for the making and wastage percentage, get the buyback policy in writing and check the HUID.