How to Calculate Gold Jewelry Price: Karat Purity (24K vs 22K), Making Charges & 3% GST
Understand how jewelers calculate final retail gold jewelry bills from 24K bullion spot rates, 22K (916) and 18K (750) purity ratios, percentage vs flat making charges, and 3% GST.
When buying gold jewelry or coins, the headline market rate quoted in financial news is usually for 24 Karat (99.9% pure) bullion per 10 grams or per troy ounce. Ornaments, however, are crafted in 22K (91.6% purity), 18K (75.0% purity), or 14K (58.3% purity) so the metal is durable enough to hold settings.
1. Karat Purity Conversion Table
| Karat Grade | Hallmark Stamp | Pure Gold Ratio | Typical Usage |
|---|---|---|---|
| 24 Karat (24K) | 999 / 995 | 99.9% (24 / 24) | Investment bars, bullion coins (too soft for daily rings) |
| 22 Karat (22K) | 916 | 91.67% (22 / 24) | Plain gold chains, bangles, traditional wedding jewelry |
| 18 Karat (18K) | 750 | 75.0% (18 / 24) | Diamond-studded rings, fine gemstone settings |
2. The Complete Jeweler Billing Formula
1. Base_Gold_Value = Weight_in_Grams × Karat_Rate_per_Gram
2. Making_Charges = Base_Gold_Value × (Making_Percent / 100) // or Flat Fee × Grams
3. Taxable_Value = Base_Gold_Value + Making_Charges
4. GST_Amount = Taxable_Value × 0.03 // 3% GST on jewelry
5. Final_Bill = Taxable_Value + GST_AmountVerify any jeweler's estimate before purchasing with our interactive Gold Jewelry Price & GST Calculator.
Frequently Asked Questions
Is the 3% GST charged only on the gold value or also on the making charges?
When you purchase finished gold jewelry from a retail jeweler, the 3% GST is applied to the combined subtotal of (Gold Metal Value + Making Charges).
What does BIS 916 hallmark mean on 22K gold?
916 indicates that 91.6% of the alloy weight is pure 24K gold (22 divided by 24 = 0.9166), with the remaining 8.4% consisting of strengthening metals like copper, silver, or zinc.