Essential Knowledge
Pricing, Weight & Measurement
The price tag on gold jewellery is not just "gold price × weight". Understanding weight units, gross vs net weight, making charges, and GST empowers you to verify every bill and compare shops fairly.
Gold Weight Units Around the World
Gold is traded internationally in troy ounces, but in India you will hear tola, gram, and sovereign depending on the region. Here is every unit you need to know:
| Unit | In Grams | Where Used |
|---|---|---|
| 1 Gram (g) | 1.000 g | Universal standard, most Indian jewellers |
| 1 Tola | 11.664 g | North India, Pakistan, Nepal, Bangladesh |
| 1 Troy Ounce (oz t) | 31.103 g | International gold markets (London, COMEX) |
| 1 Sovereign | 8.000 g | South India (Tamil Nadu, Kerala) |
| 1 Kilogram (kg) | 1,000 g | Bullion trading, central banks |
| 1 Carat (ct) | 0.200 g | Gemstone weight (not gold purity) |
| 1 Avoirdupois Ounce | 28.350 g | General use (NOT for gold) |
Quick Conversion Table
Use this table when converting between units. These are the conversions every gold buyer should know:
| From | To | Multiply By |
|---|---|---|
| Tola | Grams | 11.664 |
| Grams | Tola | 0.0857 |
| Troy Ounce | Grams | 31.103 |
| Grams | Troy Ounce | 0.0322 |
| Sovereign | Grams | 8.000 |
| Grams | Sovereign | 0.125 |
| Tola | Troy Ounce | 0.375 |
| Troy Ounce | Tola | 2.667 |
Carat vs Karat — The Common Confusion
Carat (ct) — Weight
- Measures gemstone weight
- 1 carat = 0.200 grams
- Used for diamonds, rubies, emeralds
- A 2-carat diamond weighs 0.4 grams
Karat (K) — Purity
- Measures gold purity
- 24K = 99.9% pure gold
- 22K = 91.6% gold (Indian standard)
- 18K = 75% gold (international jewellery)
Remember: Carat with a C is for stones, Karat with a K is for gold purity. In India, both are often written as "carat" which causes confusion. Always clarify context.
Gross Weight vs Net Weight
This is the single most important concept for any gold buyer. The difference between gross and net weight directly affects how much you pay.
Gross Weight
Total weight of the entire piece — gold + stones + beads + lac (wax filling) + meena (enamel) + any other material. This is what the scale shows when you place the whole piece on it.
Net Weight
Weight of only the gold in the piece after deducting all non-gold materials. This is the weight you should be charged for at the gold rate.
Why it matters: If a necklace has a gross weight of 25g but contains 3g of stones and 1g of lac filling, the net gold weight is only 21g. If the jeweller charges you for 25g at gold rate, you are overpaying for 4g of non-gold material at gold prices.
Typical Jewellery Weights
Gold jewellery varies widely in weight. Here are common ranges to help you understand what to expect when shopping:
Values shown are typical mid-range weights. Actual weights vary by design, length, and thickness.
The Price Formula
Final Price = Metal Value + Making Charges + GST
Metal Value
= Net weight (g) x Rate per gram x Purity factor
Making Charges
= Per gram rate OR % of metal value (varies by design)
GST
= 3% on metal value + 5% on making charges
Worked Example — From Weight to Final Price
Let's calculate the full price of a 22K gold necklace with a gross weight of 20g, containing 1.5g of stones. Today's gold rate: ₹7,200/g. Making charges: ₹500/g. Wastage: included in making.
| Step | Calculation | Amount |
|---|---|---|
| Net Gold Weight | 20g gross - 1.5g stones | 18.5 g |
| Metal Value | 18.5g x ₹7,200/g | ₹1,33,200 |
| Making Charges | 18.5g x ₹500/g | ₹9,250 |
| Stone Charges | Polki stones (separate) | ₹3,500 |
| GST on Metal (3%) | ₹1,33,200 x 3% | ₹3,996 |
| GST on Making (5%) | ₹9,250 x 5% | ₹463 |
| Total Price | ₹1,50,409 |
Notice: if the jeweller had charged you on the gross weight (20g) instead of the net weight (18.5g), the metal value alone would be ₹1,44,000 — that is ₹10,800 more than the correct amount. This is why understanding net weight matters.
Making Charges Explained
Making charges pay for the craftsmanship — the labour, artistry, and skill to turn raw gold into jewellery. They vary based on complexity:
| Design Type | Making Cost | Examples |
|---|---|---|
| Plain / Simple | ₹200-400/g | Chains, plain bangles, bars |
| Machine-Made | ₹400-700/g | Italian chains, laser-cut earrings |
| Handcrafted | ₹700-1,200/g | Bridal sets, temple jewellery |
| Kundan / Meenakari | ₹1,200-2,500/g | Rajasthani sets, polki pieces |
| Antique Finish | ₹800-1,500/g | Matte finish, oxidised temple sets |
Price Breakdown Visual
Where your money goes when you buy a gold necklace:
For a typical 22K gold piece, approximately 72% of the price is the raw gold value — this is what you get back on resale.
The remaining 28% covers craftsmanship (making charges), government taxes (GST), and minimal material wastage during manufacturing.
Wastage Charges Explained
During manufacturing, some gold is inevitably lost — in filing, cutting, polishing, soldering joints, and finishing. This lost gold is accounted for as "wastage".
| Jewellery Type | Typical Wastage | Reason |
|---|---|---|
| Plain bangles / chains | 2-4% | Minimal cutting and filing |
| Machine-made pieces | 3-5% | Die-casting has moderate loss |
| Handcrafted designs | 5-8% | Extensive filing, soldering, polishing |
| Filigree / intricate work | 8-12% | Delicate wire work, high material loss |
| Kundan / jadau setting | 6-10% | Stone setting requires reshaping |
Are wastage charges justified? Yes, some wastage is genuine and unavoidable. However, some jewellers inflate wastage to increase the bill. Ask whether wastage is included in the making charges or charged separately. At Gondilal Saraf, making charges include all wastage — there are no hidden extras.
Why Gold Rates Change Daily
Global Factors
- International spot price (London Fix)
- US Dollar strength
- Central bank gold reserves
- Global geopolitical events
Indian Factors
- Import duty (currently ~15%)
- INR/USD exchange rate
- Domestic demand (wedding season)
- Government policy changes
Resale & Exchange Value
When selling or exchanging old gold, you get the metal value only — making charges are not refunded. This is standard across all jewellers.
Tip: When buying for investment, choose designs with the lowest making charges (plain chains, bangles, coins). When exchanging old gold for new, you only lose the making charge difference.
How Gold Price Reaches You
London Fix
International spot price set twice daily
Import
India imports + 15% duty + forex
Bullion
Refiners sell to jewellers at wholesale
Weigh
Net gold weight calculated on BIS scale
Price
Metal + making + GST = final bill
Regional Practices in India
Gold measurement and billing practices vary across India. Here is what to expect by region:
| Region | Common Unit | Billing Style |
|---|---|---|
| North India (UP, Delhi, Rajasthan) | Grams & Tola | Making charges per gram |
| South India (TN, Kerala) | Sovereign & Grams | Wastage % + making per gram |
| West India (Gujarat, Maharashtra) | Grams | Making as % of metal value |
| East India (Bengal, Odisha) | Grams & Bhori* | Making charges per piece |
*Bhori is a Bengali unit equal to approximately 11.66g (same as tola).
Tips for Smart Gold Buying
Always watch the weighing
Stand where you can clearly see the digital scale display. Never accept a weight reading you did not witness.
Ask for net weight on the bill
Your invoice should clearly show gross weight, stone/non-gold deductions, and net gold weight separately.
Request re-weighing if unsure
Any honest jeweller will happily re-weigh a piece. If they refuse or seem reluctant, that is a red flag.
Understand the wastage policy
Before buying, ask if wastage is included in making charges or charged separately. Get the percentage in writing.
Compare making charges per gram
The gold rate is the same everywhere. Compare making charges and net weight across shops to find the best deal.
Choose simple designs for investment
Plain chains, bangles, and coins have the lowest making charges, so you lose less on resale or exchange.