How the Gold Rate Is Actually Decided — Making Charges, GST, Hallmarking & Purity

Sunday, 18 October 2026 — markets are closed for the weekend, so instead of a rate I want to pull back the curtain on something buyers ask me about almost every day: how is the price of a gold ornament actually decided? The “gold rate” you see in the news is only the first ingredient. Here is the whole recipe, in plain language.

1. The day's gold rate — the starting number

The headline gold rate is set by global markets, not by any single jeweller. It starts with the international spot price of gold in US dollars per troy ounce, which is then converted into rupees using the day's USD–INR exchange rate, and adjusted for India's import duty and local demand. That is why the rate moves every day — sometimes within the day — and why a weaker rupee can push prices up even when global gold is flat. Jewellers across India take this benchmark and quote a per-gram rate for each purity.

2. Purity — what 24K, 22K and 18K really mean

Karat (K) measures how much of the metal is pure gold. 24K is 99.9% pure — soft, and used mainly for coins and bars rather than everyday ornaments. 22K is 91.6% pure (the classic choice for Indian gold jewellery — look for a “916” stamp). 18K is 75% pure (“750”), stronger and ideal for diamond and gemstone settings. 14K is 58.5% pure (“585”), even more durable and lighter on the pocket. Lower karats cost less per gram because they contain less gold — so the purity you pick directly changes the base price.

3. Making charges — where two pieces diverge

Making charges pay for the craftsmanship that turns raw gold into a finished ornament. They are quoted one of two ways: as a percentage of the gold value (commonly in the region of 8–25%, indicative and varying widely) or as a flat amount per gram. Intricate, handcrafted and antique designs carry higher making charges than simple machine-made plain-gold pieces, because they take more skill and time. Some bills also show a small “wastage” charge for gold lost in crafting. This is the one part of the price that is genuinely negotiable and worth understanding before you buy — always ask whether making is a percentage or a flat rate.

4. GST and hallmarking — the official bits

On gold jewellery in India, GST is charged at 3% on the value of the ornament (gold plus making), and this is set by the government, the same for every jeweller. On top of that, every hallmarked piece carries a small hallmarking charge (a modest fixed amount per article) for the BIS certification. Since hallmarking became mandatory, genuine gold must carry a BIS hallmark along with a 6-digit alphanumeric HUID (Hallmark Unique Identification) — your proof that the purity on the bill is real. You can verify a HUID yourself through the BIS Care app.

5. Putting it together — a simple illustration

Here is the shape of the maths (with round, illustrative numbers — not today's rate). Suppose 22K gold is quoted at an indicative ₹9,000 a gram and you choose a 10-gram chain. The gold value is ₹90,000. Add making at, say, 12% — that is ₹10,800. Subtotal ₹1,00,800. Add 3% GST — roughly ₹3,024. Plus a small hallmarking charge. Your final bill lands near ₹1,03,900. Change the design to something heavier on craftsmanship and the making charge — not the gold — is what moves the total. That is the single most useful thing to understand before you shop.

This weekend's featured pieces

Rose Gold Diamond Earrings (0.35ct)From ₹30,355★★★★★14K rose gold with VVS-VS diamonds — an easy everyday favourite. Rose Gold Diamond Earrings (0.47ct)From ₹39,248★★★★★A touch more sparkle for festive evenings and gifting. Yellow Gold Diamond Ring (0.44ct)From ₹35,348★★★★★Classic 14K yellow gold — a graceful pick for proposals. Rose Gold Diamond Pendant (0.05ct)From ₹7,734★★★★★A dainty daily-wear pendant and a lovely first-diamond gift. Yellow Gold Diamond Pendant (0.33ct)From ₹21,376★★★★★Warm yellow gold with a bright diamond — a milestone piece.

Why buyers love these: each piece is 14K gold with certified VVS-VS diamonds, hallmarked and clearly priced, so you can see exactly where the gold value ends and the craftsmanship begins. They are made for real wear — everyday earrings, a pendant for gifting, a ring for a milestone — and the lower-karat gold keeps them both durable and friendly on the budget.

Frequently asked

How is the price of gold jewellery calculated in India?
Gold value (day's rate for your purity × weight) + making charges + 3% GST + a small hallmarking charge. The gold rate is the same benchmark everywhere; the making charges and design are what make two pieces differ in price.

What is the difference between 22K and 18K gold?
22K is 91.6% pure gold (stamped “916”) and is the traditional choice for gold jewellery; 18K is 75% pure (“750”), more durable and the usual choice for diamond and gemstone jewellery. 18K costs less per gram because it contains less gold.

What is a BIS hallmark and HUID, and why does it matter?
The BIS hallmark certifies your gold's purity, and the HUID is a unique 6-digit code stamped on every hallmarked piece. Together they are your assurance that the purity you paid for is genuine — you can check the HUID yourself using the BIS Care app.

— Nitin Bardia / AT Jewels