In this guide
Walk into any jewellery showroom in Tamil Nadu and ask the price of a gold chain, and you will get an answer that has at least four parts to it. The gold rate is only the first. What follows — making charges, value addition, wastage, GST — is where most buyers lose the thread, and where the real difference between one shop's price and another's actually lives.
This guide explains every component in plain language, with worked examples at today's rate. Our aim is simple: when you next stand at a jewellery counter, anywhere in India, you should be able to work out for yourself whether the number you are being quoted is reasonable.
What are making charges?
Gold in its raw form is a bar or a coin. Turning it into a kasumalai, a bangle or a temple-work necklace takes a goldsmith days or sometimes weeks of skilled labour. The making charge is what you pay for that craftsmanship — the design, the labour, the tooling, and the small quantity of gold genuinely lost during melting, drawing, cutting and polishing.
It is not a hidden fee or a markup that shops invent. It is the price of turning metal into an ornament. But it is the part of your bill with the widest variation, because a machine-made lightweight chain and a hand-crafted antique necklace involve completely different amounts of work.
The one-sentence version
You pay for the gold (weight × today's rate), plus the work (making charges or value addition), plus GST. Everything else on the bill is a detail of one of those three.
How making charges are calculated
There are two common methods in Indian jewellery retail, and it matters which one your jeweller uses.
1. Percentage of gold value
The most common method in South India. The making charge is a percentage of the gold value of the piece.
Example: a 20-gram 22K necklace at a gold rate of ₹13,255 per gram has a gold value of ₹2,65,100. At 10% making charges, you pay ₹26,510 for the workmanship.
2. Fixed rate per gram
Common for plain chains and lightweight daily-wear items. The charge is a flat amount per gram — say ₹400 per gram — regardless of the gold rate.
Example: the same 20-gram necklace at ₹400 per gram costs ₹8,000 in making charges.
The important consequence: when gold prices rise, percentage-based making charges rise with them; per-gram charges do not. In a year when gold has climbed steeply, a per-gram making charge can work out considerably cheaper. Ask which method applies before you fall in love with a piece.
Wastage, value addition and making charges — what's the difference?
These three terms are used loosely and often interchangeably, which is exactly why buyers get confused. Here is what each properly means.
| Term | What it actually is |
|---|---|
| Making charges | The labour and craftsmanship cost of turning gold into an ornament. |
| Wastage | Gold genuinely lost in the process of melting, drawing wire, filing and polishing. Traditionally billed as an extra percentage of weight. |
| Value addition (VA) | A modern umbrella term that combines making charges and wastage into a single percentage on the tag. Most organised jewellers now quote VA rather than listing wastage separately. |
Older billing practices charged wastage separately, sometimes at 8–12% on top of making charges, which is how a piece could quietly become far more expensive than the buyer expected. The shift to a single, printed value-addition figure on the tag is a genuine improvement in transparency, and it is the practice we follow.
What is a fair making charge?
There is no single correct number, because the honest answer depends entirely on the work involved. But there are well-established ranges in the Indian market, and knowing them protects you.
| Type of jewellery | Typical value addition |
|---|---|
| Plain gold coins and bars | 2–5% |
| Machine-made plain chains | 4–8% |
| Everyday bangles, simple studs | 8–12% |
| Hand-crafted, stone-set and casting work | 12–20% |
| Temple jewellery, antique and bridal sets | 15–25%+ |
Two honest observations that most buying guides skip:
High making charges are not automatically a rip-off. A hand-made antique Lakshmi haaram with intricate nakashi work genuinely takes a craftsman weeks. Paying 20% on that is paying for real, visible artistry. Paying 20% on a plain machine-made chain is not.
Very low making charges deserve a second look. If a shop quotes making charges far below the market for elaborate work, ask about purity and hallmarking. The economics have to balance somewhere, and the honest place to check is the assay certificate.
For context on our own pricing: at V. Chetty, value addition of 4–6% applies on stone, casting, exclusive antique pieces and ornaments below 2 grams, and this is printed on every tag before you decide.
Reading your bill, line by line
Here is a complete worked example for a 20-gram 22K gold necklace at a rate of ₹13,255 per gram with 12% value addition.
| Line item | Calculation | Amount |
|---|---|---|
| Gold value | 20 g × ₹13,255 | ₹2,65,100 |
| Value addition @ 12% | 12% of ₹2,65,100 | ₹31,812 |
| Subtotal | — | ₹2,96,912 |
| GST @ 3% | 3% of ₹2,96,912 | ₹8,907 |
| Total payable | — | ₹3,05,819 |
Note that GST is charged on the gold value plus making charges combined, not on the gold alone. If a piece has hallmarking charges, those are added before GST as well.
If your bill does not show these components separately, ask for one that does. A jeweller confident in their pricing has no reason to hide the breakup.
Six ways to pay less in making charges
- Buy plain or lightly worked designs for investment. If your goal is to hold value, every rupee of making charge is a rupee you do not recover at resale. Coins and plain chains are the efficient choice.
- Ask for the per-gram method on plain items. When gold rates are high, a fixed per-gram charge often beats a percentage.
- Buy during a scheme. Advance purchase plans commonly waive part or all of the value addition. Ours waives up to 11% as per tag on ornaments and coins bought under the plan — on a ₹2.65 lakh purchase, that is a meaningful saving.
- Shop the festive offers, but check the base rate. A "zero making charges" offer on a piece whose gold rate is quoted above the market is not a discount. Compare the total, not the headline.
- Consider exchanging old gold. Exchanging old ornaments offsets the gold value of a new purchase, though you still pay making charges on the new piece.
- Do not pay stone weight as gold. If a piece has stones, confirm they are billed separately and not counted in the gold weight.
A note on resale
When you sell or exchange gold jewellery, you are paid for the gold content, not for the making charges you originally paid. This is the single most important thing to understand about jewellery as an investment: the more elaborate the piece, the larger the gap between what you paid and what it will fetch. Buy elaborate pieces because you love them and will wear them; buy coins and plain gold if the purpose is savings.
Five questions to ask before you buy
- What is the value addition percentage on this piece, and is it printed on the tag?
- Is the making charge a percentage or a fixed amount per gram?
- Is the piece BIS hallmarked, and can I see the HUID?
- If it has stones, how is the stone weight billed?
- What is your buyback policy, and what deductions apply?
Any jeweller worth buying from will answer all five without hesitation. At our showroom on Officers Line, we print the breakup on every bill and explain each line before you pay — a habit we have kept for five generations.
Have a question about a specific piece?
Send us a photograph on WhatsApp and we will tell you the weight, the value addition and the all-in price — before you visit.