Academy · Foundation

What you actually pay: the all-in per-gram number

Lesson 05 of 0811 min readFree · no sign-in

The number on the shop's rate board is not a price. It is one input into a price. Between the international gold price and the figure at the bottom of your bill sit six separate steps, and only two of them are negotiable.

This lesson walks the whole chain — London spot, the currency conversion, import duty, the local board rate, making, hallmarking and tax — with every step's arithmetic shown. Then it reduces the result to a single figure: rupees per gram of fine gold actually received.

That one number is the point of the lesson. It is the only figure that compares honestly across shops, across karats, across making models and across countries.

The six steps, in order

  • 1 · Spot. Gold trades internationally in US dollars per troy ounce. This is the number everything else is built on, and nobody in the chain controls it.
  • 2 · Units and currency. A troy ounce is 31.1035 grams. Dollars become rupees at the day's exchange rate. Two mechanical conversions, no margin in either.
  • 3 · Import duty. India imports nearly all its gold. Duty is added on landing. In May 2026 the headline import duty on gold was raised from 6% to 15% — a change that moved every Indian gold price by a step in a single day.
  • 4 · The board rate. The local bullion association publishes a rate; the shop shows it, usually with a small premium for local supply. This is the number you see quoted, and it is already four steps from spot.
  • 5 · Making and wastage. The fee for turning metal into a piece. This is Lesson 04, and it is where the real variation is.
  • 6 · Hallmarking and tax. A small per-article hallmarking fee, then GST at the end.

Steps 1 to 4 are the same for every shop in your city on a given morning. Steps 5 and 6 are where two bills for the same necklace end up thousands of rupees apart.

Spot to the board, worked through

Illustrative figures throughout, chosen to show the mechanism. Use the day's real spot, rate and duty.

  • Spot gold $3,300 per troy ounce. Divided by 31.1035 g = $106.10 per gram of pure gold.
  • At ₹88.00 to the dollar: 106.10 × 88.00 = ₹9,336 per gram, landed cost before duty.
  • Import duty at 15%: 9,336 × 1.15 = ₹10,737 per gram of 24-karat gold.
  • For 22 karat, multiply by the fineness 0.916: 10,737 × 0.916 = ₹9,835 per gram.

The board in the shop reads ₹9,850 — about ₹15 above that, which is the local premium. That is a normal gap, and it is not the part worth arguing about.

Notice what duty alone did. Without it the 22k rate would be roughly ₹8,552. The 15% duty adds close to ₹1,300 per gram, which is why the India-versus-Gulf question in Lesson 08 exists at all.

Why the board rate can differ between two shops Different bullion associations, different local premiums, and different times of day — rates are typically fixed once or twice daily and do not follow spot minute by minute. A gap of a few rupees per gram is ordinary. A gap of a few hundred is a question.

The board to the bill

The same necklace from Lesson 04: 22-karat, gross weight 25.0 g, stones 3.0 g, net gold 22.0 g. Shop A charges 10% making on the net gold value. Board rate ₹9,850.

  • Gold value — 22.0 g × ₹9,850 = ₹216,700
  • Making at 10% of gold value = ₹21,670
  • Hallmarking charge, per article = ₹47
  • GST on the gold, at 3% of ₹216,700 = ₹6,501
  • GST on the making charge, at 5% of ₹21,670 = ₹1,084
  • Total ₹246,002

In Lesson 04 this bill stopped at ₹238,370, or ₹10,835 per gram, because tax and hallmarking were still to come. Finished, it is ₹11,182 per gram of 22-karat metal — and the stones are still priced separately on top of that.

The tax argument, and why it matters less than it sounds

GST on gold itself is 3%. The making charge is where the readings diverge: billed as a separate service it attracts 5%, while treated as part of a single composite supply of jewellery the whole thing goes at 3%. Different jewellers bill it differently and the position has been argued more than one way.

Work out what that argument is actually worth on this bill. At 5% on making, tax is ₹7,585. At 3% on the combined ₹238,370, it is ₹7,151. The difference is ₹434.

Now compare that with Lesson 04's finding: the same "10% making charge" calculated on gross weight instead of net cost ₹2,955 more. The base of the making charge is worth roughly seven times the entire tax argument. Spend your attention accordingly.

Rates and their application change. Confirm the current position with your own accountant rather than with the shop's software.

The worksheet

Here is the thing to keep. One formula, three columns, and it works on any quote from any shop in any country.

TOTAL BILL ÷ ( NET METAL WEIGHT × FINENESS ) = PRICE PER GRAM OF FINE GOLD SHOP TOTAL FINE GRAMS ₹ / g FINE A · 10% ON NET 246,002 20.152 12,207 B · 10% ON GROSS 249,104 20.152 12,361 C · PER-GRAM + WASTAGE 256,275 20.152 12,717 LANDED COST OF THE SAME FINE GOLD 10,737
The same necklace, three quotes, finished bills including tax. Every one of them is priced against the same ₹10,737 per gram of fine metal — the spread between them is entirely making, wastage and the base each was calculated on.

How to use it

Fine grams is the net metal weight multiplied by the fineness — 22.0 g of 22-karat is 22.0 × 0.916 = 20.152 g of actual gold. Use net weight, never gross: you are counting gold, not stones.

Shop A's finished bill of ₹246,002 divided by 20.152 g gives ₹12,207 per gram of fine gold. The landed cost of that same fine gold was ₹10,737. So the piece carries 13.7% over the metal, all-in, tax included.

That percentage is the figure to compare. It survives every difference between quotes:

  • Different karats. A 22k and an 18k quote are not comparable per gram — but they are perfectly comparable per gram of fine gold.
  • Different making models. Per-gram, percentage and per-piece all collapse into one number.
  • Different countries. Convert to one currency and the Dubai souk and the Indian showroom sit in the same column.
  • Different days. Expressing the premium as a percentage over the metal removes the rate move entirely.
What to ask for, in writing Gross weight and net weight, separately. The rate applied and the karat. The making charge, and the base it was calculated on. The wastage percentage if any. Stone value as its own line. Hallmarking charge. Tax, itemised by what it was charged on. With those seven numbers you can compute the per-gram figure yourself, and any shop that will not put them on paper has told you something.

A sense of scale

Once you have run the worksheet on a few quotes, the numbers start to mean something.

  • Plain machine-made chains and light items typically sit at the low end of the making range.
  • Heavy handmade and intricate work sits far higher, and often deserves to.
  • Bars and coins carry the smallest premium over metal of anything you can buy — which is Lesson 07.

The premium is not automatically wrong. Craftsmanship is real and it costs money. What is wrong is not knowing what the premium is, which is the condition most buyers are in at the counter.

What this lesson cannot tell you

It cannot tell you what premium is reasonable for a given piece. A worksheet compares quotes; it does not appraise workmanship, and a low per-gram number on a badly made chain is not a good buy.

It also stops at the moment you pay. What the piece is worth when you come to sell it back is a different arithmetic with a different answer — usually a much less flattering one — and that is Lesson 06.

Kept in this browser only — no account, and nothing is sent anywhere. Finish all eight and you can claim a certificate.

Educational content only. Not financial, investment or tax advice. Aurix does not buy, sell, store or broker metal, and does not quote executable prices. Duty and tax figures reflect published material read on 24 August 2026 and change without notice.