Gold Making Charges Explained
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
| Method | How it works | Common for |
|---|---|---|
| Percentage | A % of the gold value (weight × rate) | Most chains and branded jewellery |
| Per gram | Fixed ₹ per gram of gold | Plain chains, bangles, coins at some jewellers |
| Flat per piece | Fixed ₹ amount | Small or light items: studs, nose pins, pendants |
| Wastage / VA | Extra gold weight added (as %) and charged at the gold rate | Tamil 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.
| Quote | Making charge | Before GST | With 3% GST |
|---|---|---|---|
| 12% of gold value | 12% × ₹2,45,000 = ₹29,400 | ₹2,74,400 | ₹2,82,632 |
| ₹1,100 per gram | 20 × ₹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
- Ask for the charge in rupees. Get the gold value, making charge and GST as separate lines before agreeing.
- Compare like with like. Convert VA and per-gram quotes into a percentage of gold value, or all into rupees, for the same weight.
- 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.
- Use festival offers carefully. "Up to X% off making" usually applies to selected designs. The gold rate itself is not discounted.
- Exclude stones. Making charge should apply to net gold weight, not to stones or beads weighed together.
- 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.