Making charges and wastage on gold jewellery
By HouseOfCoder · Last reviewed
Making charges are what a jeweller charges to turn gold into a piece of jewellery. They are quoted two ways, a percentage of the gold value or a flat rupee amount per gram, and on a typical purchase they add somewhere between 3% and 25% to what you pay. That spread is enormous, and it is the line worth your attention, because the metal rate is the same in every shop on the street.
The two quoting bases
Percentage of gold value. A 12% charge on ₹1,40,593 of gold is ₹16,871. Because it tracks the metal value, this basis rises when the gold rate rises, even though the labour has not changed.
Flat rupees per gram. ₹500 a gram on a 10 gram chain is a flat ₹5,000, whatever gold is doing that morning.
Neither is inherently cheaper. Which one favours you depends on the rate and the piece, and a shop will often quote whichever basis flatters its number that day. Ask for both.
Wastage is a different thing entirely
Wastage covers metal genuinely lost in cutting, shaping and polishing. Where it is charged, it commonly runs 5–7% for standard designs and higher for intricate handmade work.
Here is the part that catches people. Making charges are a percentage of value. Wastage is a percentage of weight. A 6% wastage on a 10 gram chain means you are billed for 10.60 grams: 0.60 grams of extra metal, worth ₹8,436 at today’s rate before any charge is added on top. And because the making percentage is then applied to that larger metal value, wastage quietly inflates the making charge too.
Why the lowest percentage can be the dearest quote
Three quotations for the same 10 gram 22K chain, at today’s benchmark of ₹14,059.30 a gram:
| Quotation | Billed weight | Metal | Making | Total with GST |
|---|---|---|---|---|
| A: 12% making, no wastage | 10.00 g | ₹1,40,593 | ₹16,871 | ₹1,62,234 |
| B: ₹500/g making, no wastage | 10.00 g | ₹1,40,593 | ₹5,000 | ₹1,50,007 |
| C: 8% making + 6% wastage | 10.60 g | ₹1,49,029 | ₹11,922 | ₹1,65,826 |
Quotation C advertises the lowest making charge and is the most expensive of the three, ₹3,591 more than the 12% quote. The 8% is real; it is just applied after six percent of extra weight has been added to the bill.
This is not a trick unique to one shop. It is what happens whenever two quotations are compared on their headline percentage instead of their total.
What to ask before you agree
- What weight am I being billed for? Not the weight of the piece, the weight on the invoice. If those differ, the difference is wastage.
- Is the making charge a percentage or per gram? And if a percentage, of what? The metal value before or after wastage.
- Is wastage included or separate? Asked plainly, before discussing discounts.
- Can I have the breakdown in writing? Metal, making, wastage, hallmarking, GST. A shop that will not itemise is telling you something.
Then compare shops on the final billed total for the same piece. It is the only comparison that means anything.
What is negotiable
Making charges often are, more so on plain gold than on stone-set or handmade pieces, more so on larger purchases, and more so during festival promotions when chains advertise reduced or waived making charges. Read those offers carefully: a waiver on making charges says nothing about wastage.
Wastage is rarely negotiable, because jewellers treat it as a cost rather than a margin. That makes it more important to know whether it is in the quote at all.
There is no statutory cap on either. BIS regulates hallmarking and purity, not what a shop charges for labour. The protection available to you is comparison and an itemised bill.
None of it comes back
When you sell or exchange, you are paid for gold content. Making charges and wastage are not recoverable. They are the cost of owning a finished object rather than metal. On a purchase where charges ran 20%, that is a fifth of the purchase price that never returns, which is worth knowing before treating jewellery as an investment. Cheaper ways to hold gold are compared here. Selling or exchanging old gold puts a number on the gap.
Run your own numbers with the jewellery price calculator. It itemises the same lines as the table above and lets you switch between the two making-charge bases.
For how the tax on all of this works, and why a retail bill is 3% rather than 3% plus 5%, see GST on gold in India.
Common questions
- What are making charges on gold?
- The jeweller’s charge for turning metal into a finished piece: design, labour, finishing and their margin on it. They are quoted either as a percentage of the gold value or as a flat rupee amount per gram, and they are separate from the metal itself.
- What is the difference between making charges and wastage?
- Making charges are a fee, calculated on the value of the gold. Wastage is extra gold weight added to the bill to cover metal lost in crafting, so it is charged on weight. That difference matters: wastage raises the metal cost and can raise the making charge with it.
- Are making charges negotiable?
- Making charges usually are, particularly on plain gold, on larger purchases and during festival promotions. Wastage is rarely negotiable, which is why it is worth asking whether a quotation includes it before you focus on the headline percentage.
- Is there a legal cap on making charges in India?
- No. BIS regulates hallmarking and purity, not pricing. Making charges and wastage are commercial terms set by each jeweller, which is precisely why comparing quotations on the same basis matters.
- Do I get making charges back when I sell?
- No. On resale or exchange you are paid for the gold content only. Making charges and wastage are spent at the moment of purchase and are not recoverable.