Gold Stock, Making Charges & Hallmarking: Jeweller Guide

Why a Standard Inventory System Fails a Jewellery Shop

A kirana tracks units. A pharmacy tracks strips and bottles. A jeweller tracks grams of 22-karat gold, grams of 18-karat gold, and those numbers are never the same thing even if the physical weight is identical.

Most generic stock software treats a 10-gram 22K bangle and a 10-gram 18K bangle as two units of the same category. That's a problem when gold rates move, when a customer asks for a buyback price, or when your GST filing needs the making charge separated from the metal value.

This post is about what jewellery inventory actually needs to track, and why getting it right saves you real money at audit time.

Tracking Stock by Purity, Not Just by Piece

The weight on the tag is not the whole story. A 10-gram piece in 22K contains roughly 9.17 grams of pure gold. The same weight in 18K holds about 7.5 grams. If you're buying back old jewellery or pricing against the day's gold rate, that distinction matters a lot.

Your stock records should capture, at minimum:

• Gross weight of the piece
• Purity (22K, 18K, 14K, or expressed as 916, 750, 585 fineness)
• Net gold weight (gross minus stone weight and alloy)
• Making charge per gram or as a flat amount
• Stone details if the piece carries diamonds or polki

Picture a shop in Coimbatore with 400 pieces on display. If the owner tracks only piece count and selling price, the day the gold rate jumps Rs. 500 per gram, repricing is a half-day manual job. If the shop tracks net gold weight per piece, repricing is a calculation, not a guessing game.

Making Charges and Why GST Treats Them Separately

This is where a lot of jewellers run into trouble at filing time.

Under GST, gold (as metal) attracts 3%. Making charges, being a service component, attract 5%. If you raise an invoice that shows one combined price, you've either underpaid on making charges or created a document your accountant can't use cleanly.

A correct jewellery invoice splits it:

• Metal value (weight x prevailing rate) taxed at 3%
• Making charge taxed at 5%
• Stone value (if any) at applicable rate

Some shops avoid this by selling at an all-inclusive rate and backing out the components later. That works until an audit asks to see how you arrived at the metal value and making charge for 200 invoices. It's a long afternoon.

The cleaner habit is to record the split at the point of sale, every time, even for small purchases. Your GST-3B reconciliation will thank you.

Hallmarking Compliance: What You Need to Keep

Since the mandatory hallmarking rollout, every piece of gold jewellery sold in notified districts needs a BIS hallmark. The HUID (Hallmark Unique ID) printed on each piece is meant to give traceability from the assaying centre to the customer.

From a stock management angle, this means:

• Each piece entering your shop should carry its HUID
• Your purchase records should log that HUID against the supplier invoice
• When the piece is sold, the HUID goes onto the sales invoice
• If a piece is melted or returned to a karigar for rework, that movement needs to be recorded too

A BIS inspection can ask you to produce the HUID trail for any piece. If your stock register just says "22K bangle, 12g, purchased from XYZ supplier on 1 April," and you have 30 such entries, you cannot tell an inspector which specific bangle went to which customer.

Keeping HUID in your stock records is not extra paperwork. It's the minimum that makes you audit-ready.

Old Gold Purchases and the Inward Stock Problem

Most jewellers buy back old gold from customers. This is the murkiest part of inventory from a compliance standpoint.

When you buy old gold:

• You need to record the weight and assessed purity
• You need to document the customer's identity (PAN is required above Rs. 2 lakh)
• The piece typically goes to a karigar or the melting pot, not onto your display shelf

But between purchase and melting, that gold sits in your possession. If a stock audit happens in that window, you need to account for it. Shops that don't have a separate "old gold received" register often find these pieces floating in their count, uncategorised, which creates discrepancies.

A simple inward register for customer gold buybacks, separate from your supplier stock, keeps things clean. Date, customer name, gross weight, assessed purity, amount paid. That's the entry. When it goes for melting, mark it out.

Karigar Accounts: The Stock That Leaves the Shop

A significant portion of a jeweller's stock is not in the shop at any given time. It's with the karigar, being crafted or repaired.

This is often tracked on paper chits, and when the karigar delivers back, the chit is torn. It works, until there's a dispute about weight. Did you send 45 grams or 47? What was the wastage agreed?

A karigar account in your stock system should track:

• Gold issued (weight and purity)
• Work order description
• Agreed wastage percentage
• Expected return date
• Actual return weight

Picture a shop issuing gold to five karigars over a month. Without written records, the owner is relying on memory for which batch went where. At month end, even a 2-gram discrepancy across all accounts adds up to a meaningful number at current gold prices.

At Rs. 7,000 per gram, 2 grams is Rs. 14,000. That's not rounding error.

What a Month-End Stock Count Actually Looks Like

A physical count in a jewellery shop is not the same as counting cartons in a storeroom. You're weighing, not just counting.

A reasonable month-end process:

• Count pieces on display by category (chains, bangles, rings, earrings)
• Weigh each category and compare against your stock register's recorded weight
• Check karigar accounts: what's out, what's expected back
• Reconcile old gold inwards against melting records
• Spot-check five to ten HUIDs against your purchase register

If the physical weight in your shop differs from your register by more than your agreed karigar wastage, there's an error somewhere. The earlier you find it, the easier it is to trace. A quarterly count that turns up a 50-gram discrepancy is a serious problem. A monthly count that finds 5 grams off is usually a data entry fix.

For the broader stock picture beyond gold, see the jewellery shop inventory guide; for getting those making charges onto a correct bill, the jewellery invoicing guide covers it.

ShelfLifePro and Jewellery Stock Tracking

ShelfLifePro lets you set up items with custom attributes, which means you can track purity, gross weight, and net gold weight against each SKU rather than just piece count. If you're currently running a paper register or a general billing software that doesn't understand gold weight, the 14-day free trial needs no credit card, which is enough to see whether it fits how your shop actually works.

The goal is simple: when a customer asks what a piece is worth in buyback, or when your CA asks for the making charge total for the quarter, you should be able to answer in under two minutes. Right now, how long does that take you?