Gold is a precious metal adapted into beautiful designs by jewellers and bought widely on special occasions. Elaborate pieces of jewellery are an important part of our culture but buying them involves additional charges as well. Buyers have to pay gold-making charges on each piece of jewellery they purchase. The amount may vary depending upon the quality and purity of the product. Here are some important details about gold making charges you must consider before buying gold.
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What are Gold Making Charges?
You pay Gold Making Charges when you buy a piece of gold jewellery. It is the cost of designing and manufacturing jewellery from raw gold. The cost of making each piece of gold jewellery depends upon its purity and size. It is expensive to produce creative designs and mold them into strong pieces of jewellery. Gold making charges of finer pieces with intricate designs are usually higher as jewellers invest more time in preparing them. Making charges on gold jewellery in India range from 3% to 25%, or a flat rate per gram of gold.
What are Gold Wastage Charges?
Gold jewellery crafting requires melting, cutting, and shaping the precious metal. Traditionally produced and handmade jewellery results in the wastage of gold. Intricate designs involve higher wastage due to their fragility than solid ones. Similarly, wastage in pieces studded with gems, diamonds, or other precious stones is also high. Jewellers usually include the cost of wasted raw material in the making charges or may even charge it separately. Wastage Charges are usually 5 to 7%. Modern methods and technology are helping curb wastage of raw material however it has not been completely eliminated.
Why do Jewellers Charge Making and Wastage Charges From Buyers?
Buyers have to pay making and wastage charges upon each piece of jewellery they buy. Jewellers charge making and wastage charges above the cost of gold in a piece of jewellery. These are the overheads they bear to manufacture your ornaments and it includes the cost of conceptualisation and designing them. When you opt to buy unique and intricate designs the cost of making and raw material wastage are higher. The labor and resources involved in making simpler or basic pieces such as coins and bars are lower. The amount you pay as making charges allows the jeweller to sustain their business.
How Does Making Charges Vary?
Jewellers may levy making charges on their jewellery but it may vary from one ornament to the other. The reason is the type, quality, purity, and source of gold used in manufacturing them. Producing each unique piece of jewellery involves a different process and a lot of creativity as well. The making charges usually include transport costs, import duty, taxes, and handling costs as well.
Jewellers levy making charges based on the intricacy of the design and purity of gold used to create the ornament. Complex designs take more time to produce and even the wastage is more so making charges would be higher. The jeweller may also choose to charge a flat rate per gram or a percentage of the total cost as making charges. Again the calculation according to both methods is different leading to varying making charges.
How To Calculate Making Charges for Gold?
Jewellers do the calculation of the final price of your gold jewellery through the following formula:
Final jewellery Price = ((Price of gold (24K/ 22K/ 18K) per gram * Weight of Gold (in grams) )+ Making charges) + GST at 3%
They may calculate the making charge through one of the two methods-flat rate or percentage basis.
- The flat rate calculation is done at a fixed price per gram.
So, if you are buying an ornament weighing 10 grams and the cost per gram is Rs. 50,000. According to the formula, the cost of gold in the ornament is 10 * 50000 = Rs. 500,000.
Now, if the jeweler uses a flat rate and levies a making charge of Rs. 3000 per gram.
The total making charge will be 10 * 3000 = Rs. 30,000
- The percentage calculation is done on the total cost of the gold you are purchasing.
Now if you calculate making charges on the same ornament at the same price.
According to the formula, the cost of gold in the ornament remains Rs. 500,000.
Now, if the jeweler levies 12% making charges then you can calculate it as follows:
12% * 500,000 = Rs. 60,000.
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