Gold Making Charges Explained

Live prices via TradingView · Page reviewed

Making charges are what a jeweller adds to the gold value to cover design, labour, metal loss and margin. They are quoted as a percentage of the gold value, a fixed amount per gram, a flat fee per piece, or, in South India, as wastage or value addition (VA). On the same piece the methods can differ by thousands of rupees, so convert every quote to rupees before comparing.

The four ways making charges are quoted

MethodHow it worksCommon for
PercentageA % of the gold value (weight × rate)Most chains and branded jewellery
Per gramFixed ₹ per gram of goldPlain chains, bangles, coins at some jewellers
Flat per pieceFixed ₹ amountSmall or light items: studs, nose pins, pendants
Wastage / VAExtra gold weight added (as %) and charged at the gold rateTamil Nadu, Kerala, Karnataka, Andhra Pradesh, Telangana

Wastage and value addition

Wastage originally compensated the goldsmith for metal lost in cutting, filing and polishing. Many South Indian jewellers now quote it as "VA" (value addition), which bundles loss and labour. A 12% VA on a 20 g piece bills you for 22.4 g of gold. Some shops quote VA plus a small per-gram making charge on top, so ask for both figures. Because wastage is charged in grams of gold, it scales with the gold price exactly like a percentage charge.

Typical ranges

Charges vary widely by jeweller, city and design. As a rough guide to what buyers typically see in India:

  • Coins and bars: a small premium, often a few percent or a fixed amount per coin.
  • Machine-made chains and plain bangles: typically in the mid-single digits to low teens as a percentage.
  • Standard jewellery with moderate design: typically around 8% to 18%.
  • Handmade, temple, antique, filigree or Kundan work: often 18% to 25% or more.
  • Light-weight fashion pieces: may carry a high percentage or a flat fee, since labour does not shrink with weight.

Machine-made pieces (cast or chain-machine work) cost less to produce than handmade work, which needs skilled hours per piece. That is the main driver of the spread, more than the karat.

Worked comparison: one chain, three quotes

Suppose you are buying a 20 g 22K chain and the 22K rate is ₹12,250 per gram (illustrative). Gold value: 20 × ₹12,250 = ₹2,45,000.

QuoteMaking chargeBefore GSTWith 3% GST
12% of gold value12% × ₹2,45,000 = ₹29,400₹2,74,400₹2,82,632
₹1,100 per gram20 × ₹1,100 = ₹22,000₹2,67,000₹2,75,010
14% wastage (VA)2.8 g × ₹12,250 = ₹34,300₹2,79,300₹2,87,679

The cheapest and most expensive quotes differ by ₹12,669 on the same weight and purity. GST at 3% applies to the whole amount including making, as explained in GST on gold. Plug in your own quotes with the jewellery price calculator.

How a rising gold price changes the comparison

If the 22K rate rises 10% to ₹13,475, the gold value becomes 20 × ₹13,475 = ₹2,69,500. A 12% charge rises to ₹32,340, while the ₹1,100-per-gram charge stays at ₹22,000. Per-gram quotes become relatively cheaper as gold gets more expensive; percentage and wastage quotes rise in step with it.

What you get back when you sell

Making charges are a cost, not part of the resale value. When you sell or exchange, the jeweller pays for the gold content only, usually at the day's rate less a deduction. On the 12% example above, ₹29,400 plus the GST on it (₹882) is not recoverable. That is why investment buyers prefer coins and bars, and why some jewellers advertise lifetime exchange at full gold value as a reason to accept their making charge. See how to sell gold.

How to negotiate

  1. Ask for the charge in rupees. Get the gold value, making charge and GST as separate lines before agreeing.
  2. Compare like with like. Convert VA and per-gram quotes into a percentage of gold value, or all into rupees, for the same weight.
  3. Check the rate first. A low making charge can hide a board rate above the market. Compare with the India gold rate or 22K price.
  4. Use festival offers carefully. "Up to X% off making" usually applies to selected designs. The gold rate itself is not discounted.
  5. Exclude stones. Making charge should apply to net gold weight, not to stones or beads weighed together.
  6. Ask about exchange terms. A jeweller with slightly higher making but a smaller buy-back deduction can be cheaper over time.

Wedding buyers ordering large sets can usually negotiate the making charge more than the gold rate, because the jeweller's margin sits in the making charge.

Frequently asked questions

What is a normal making charge for gold jewellery?
It depends on design and method. Plain machine-made chains often carry single-digit to low-teen percentages, while handmade and antique work can exceed 20%. Always compare the charge in rupees for the same piece.
Is wastage the same as making charge?
Wastage (or VA) is a form of making charge expressed as extra grams of gold. It covers metal loss and often labour. Some jewellers add a separate per-gram making charge on top, so ask for both.
Is GST charged on making charges?
Yes, at 3% on ready-made jewellery, as part of the total invoice. Only job work on your own gold attracts 5% on labour.
Do gold coins have making charges?
Coins and bars carry a smaller premium for minting and packaging rather than a jewellery making charge, which is why they cost less per gram than jewellery.
Why do light-weight pieces carry a higher making percentage?
The labour to make a 3 g pendant is not much less than for a 10 g one, but the gold value is far lower, so the same rupee labour cost becomes a larger percentage. Some jewellers switch to a flat fee or a minimum charge for small items.