The making charge is the cost nobody publishes
Rohit MenonBullion desk editorThe making charge on a finished piece is the cost of turning metal into jewellery. It is quoted as a percentage of the metal value or as a fixed amount per gram. It is not part of any benchmark, and it is not published anywhere. A buyer should ask to see it itemised on the bill.
How the making charge is quoted
A jeweller may quote the making charge as a percentage of the metal value, or as a fixed amount per gram. The percentage method means the charge rises with the metal value; the per-gram method means the charge is the same for a given weight, regardless of the metal value.
A buyer should ask which method is being used. The two methods give different charges for the same piece, and the difference is not always obvious.
Why the making charge is not part of any benchmark
The benchmark is the metal value, and it is published by the association. The making charge is the jeweller's own cost, and it is not published anywhere. It is not part of the benchmark, and it is not part of the tax calculation until the tax is applied to the total.
A buyer who compares a shop's price to the benchmark is comparing a price that includes a making charge to a number that does not. The difference is not a premium on gold; it is the cost of making the piece.
What a buyer should ask to see itemised
A buyer should ask for the metal value, the making charge, the tax, and the total. Those are the four numbers that make up the bill. The metal value is the benchmark times the weight times the purity. The making charge is the jeweller's cost. The tax is three per cent of the total of the first two. The total is what the buyer pays.
A shop that does not itemise the making charge is making it hard for the buyer to compare prices. The making charge is the main variable between shops, and it should be shown.
The making charge on a bar or a coin
A bar or a coin may have a premium over the benchmark, which is similar to a making charge. The premium is the amount over the metal value that the seller charges. It is not published, and it varies between sellers.
A buyer of a bar or a coin should ask for the premium to be itemised. The premium is the main variable between sellers, and it should be shown.
The making charge on buy-back
When a buyer sells a piece back to a counter, the counter will pay the metal value minus a margin. The margin is the counter's cost, and it is not published. The making charge is not recovered on buy-back.
A buyer who sells a piece should know that the making charge is lost. The metal value is what is returned, minus the counter's margin. The making charge is a sunk cost.
The making charge in one sentence
The making charge is the jeweller's cost of turning metal into a piece, quoted as a percentage or per gram. It is not part of any benchmark, and a buyer should ask to see it itemised on the bill.
Key facts
Read next
Questions about karat and cost
What is the making charge?
The making charge is the cost of turning metal into a finished piece. It is quoted as a percentage of the metal value or as a fixed amount per gram. It is not part of any benchmark.
Why is the making charge not published?
The making charge is the jeweller's own cost, and it varies between jewellers. It is not published anywhere, and it is not part of the benchmark. A buyer must ask for it to be itemised.
How is the making charge calculated?
The making charge can be calculated as a percentage of the metal value, or as a fixed amount per gram. The method should be stated by the jeweller. The tax is then charged on the metal value plus the making charge.
Can the making charge be negotiated?
The making charge is a cost, and it can sometimes be negotiated. But it is not a fixed number, and it varies between jewellers. A buyer should compare the making charge between shops before deciding.
Is the making charge refunded on buy-back?
No. The making charge is lost when a piece is sold back. The buy-back price is based on the metal value only, minus a margin. The making charge is a sunk cost.
Start from the only published rate
The India Bullion and Jewellers Association announces its rate twice on every trading day. That is the reference for tax, for loans against jewellery and for buy-back counters. It is not a shop's price, and it is not what you pay.