Gold jewellery cost calculation: While calculating the price of gold jewellery, jewelers include the price according to the purity of gold, making charges, diamond or gemstone charges, GST and hallmarking charges.
Gold jewellery Price Calculation: Gold prices are currently trading at a high level. On Monday, the price of gold in the domestic bullion market had reached Rs 72,250 per 10 grams. When customers go to jewelers to buy jewellery, they definitely have some doubt in their mind regarding the prices. For this, it is important to know how jewelers calculate the prices on jewellery. There are many factors that affect the price of jewelery paid to the buyer. Apart from the price of gold, these include making charges, cost of diamonds or gems used in jewellery, etc. There is a slight variation in gold prices from jeweler to jeweler. Because their cost of buying gold (including the cost of refining and transportation etc.) varies.
How do jewellers decide the price of jewellery?
There is a formula to decide the final price of gold jewellery. This is: Final Price of Jewelery = {Gold Price*(Weight in Grams)} + Making Charges + 3% GST + Hallmarking Charges. The price of gold also depends on its purity. Prices for 24KT, 22KT, 18KT or 14KT gold will vary. The purer the gold, the higher the price. 24 carat gold will be the most expensive and 14 carat gold will be the cheapest.
Making charges and GST
Jewelers also charge making charges, which some call low wastage charges. These are usually calculated on a per gram basis or calculated on a percentage basis. Some people also use a mix of both. They take 1 percent of the current price of gold and then charge on per gram basis. For example- if the price of 22 carat gold is Rs 68,000 per 10 grams, then the making charge will be 1 percent of the price of gold per gram. That means it will be Rs 680 per gram. If you buy a 10 gram gold chain, the making charge will be Rs 6800. Talking about GST, it is levied on the total price of gold jewelery (including making charges). Hallmarking on gold has become mandatory. Hence hallmarking charges are also levied.
This is how the price is calculated
Let us understand with an example how jewelers calculate the price of jewellery. Suppose the price of 22 carat gold in a jewelery shop is Rs 65,000 per 10 grams and the price of 18 carat gold is Rs 56,000 per 10 grams. A buyer buys a 22 carat gold chain of 11 grams and a 18 carat gold diamond ring of 3.5 grams. The making charge in the jewelery shop is flat at Rs 500 per gram. Now both these jewelery are of different carat gold, so the calculation will also be different.
In case of gold chain, the price of 11 grams 22 carat gold will be Rs 71,500 (Rs 6,500X11).
Making charge on 11 grams of gold will be Rs 5500 (500X11).
In this way the total price of gold chain will be Rs 77,000 (Rs 71,500 + Rs 5,500).
Now Rs 2,310 (3% of Rs 77,000) will be added as 3 percent GST.
Hallmarking charge of Rs 45 will also be added to it.
In this way the final bill will be Rs 79,355.
The price of diamond ring will be calculated like this
- The price of gold in a 3.5 gram 18 carat gold diamond ring will be Rs 19,600 (Rs 5,600X3.5 grams).
- Making charge on 3.5 grams of gold will be Rs 1,750 (Rs 500*3.5 grams).
- The cost of diamond in the ring is Rs 4,500.
- In this way the total price of the diamond ring was Rs 25,850 (Rs 19,600+1,750+4,500).
- In this, 3 percent GST was Rs 776 (3% of Rs 25,850).
- Hallmarking charge was Rs 45. In this way, the total price of the diamond ring the customer will have to pay is Rs 26,671.
