How to calculate gold rate with GST?

No image 5paisa Capital Ltd - 1 min read

Last Updated: 28th November 2025 - 04:00 pm

Gold has always held a special place in Indian households — as jewellery, an investment, or a family heirloom. But when you walk into a jewellery shop, the price tag on that bangle or chain often leaves you wondering how the final amount is calculated. It’s not just the rate of gold that matters; a few extra components decide the total you pay. Let’s break it down.

1. Base Rate of Gold

This is the price of pure gold per gram, and it changes daily based on the international market and the rupee’s strength. Jewellers usually display the rate for 22K and 24K gold. For instance, if today’s rate for 22K gold is ₹11,741 per gram, that’s your base price.

2. Making Charges

Gold jewellery doesn’t come out of a mould — it’s crafted, designed, and polished by skilled artisans. The making charge covers this craftsmanship. It can be a fixed amount per gram or a percentage of the gold’s value, usually ranging from 5% to 15%. Suppose your jeweller charges ₹500 per gram as making charges.

3. GST (Goods and Services Tax)

Since July 2017, a 3% GST has been levied on the total price of gold plus making charges. This tax is standard across India and applies to all forms of jewellery.

Example of Manual Calculation

Say you’re buying a 10-gram gold necklace.

  • Base price: 10g × ₹6,000 = ₹60,000
  • Making charges: 10g × ₹500 = ₹5,000
  • Subtotal: ₹60,000 + ₹5,000 = ₹65,000
  • GST (3% of ₹65,000) = ₹1,950
  • Final price = ₹65,000 + ₹1,950 = ₹66,950


So, the final amount you pay for the necklace is ₹66,950.

Understanding this breakdown helps you know exactly where your money goes and ensures complete transparency the next time you buy gold — whether it’s for an occasion or investment.

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