Buying Physical Gold in India (2026): HUID Hallmarking, Making Charges Math, GST and Exchange Traps
By the CreditSmart editorial team · September 2026
The 30-second version
Three numbers decide whether your gold purchase is an investment or a donation to the jeweller: the 6-digit HUID (mandatory hallmark — verify it in the BIS Care app before paying), the making charge (anywhere from 6% to 25%+ — always negotiable, always compare per-gram vs percentage), and 3% GST charged on gold value plus making. A ₹1 lakh ornament can carry ₹20,000+ of costs you never get back at resale — which is why coins beat ornaments for investment, and paper gold beats both.
Hallmarking in 2026: what the stamp must show
Hallmarking with the HUID (Hallmark Unique Identification) is mandatory for gold jewellery and artefacts sold by registered jewellers. The current mark has three parts:
- BIS logo (the triangle mark).
- Purity/fineness code — 22K916 (91.6%), 18K750, 14K585 etc.
- 6-digit alphanumeric HUID — unique to that piece.
The 60-second check that beats every sales pitch: open the BIS Care app → “Verify HUID” → type the 6 digits from the piece. It returns the jeweller, purity and article type registered against that code. Mismatch or “not found” → walk out. Old-style hallmarks without HUID on new stock are a red flag; your existing old jewellery remains legal to hold and sell.
The making-charge math nobody shows you
Jewellers quote making charges two ways — and the same ornament can differ by thousands depending on which you accept:
| Percentage basis | Flat per-gram | |
|---|---|---|
| Quote | e.g. 14% of gold value | e.g. ₹699/gram |
| On 20g @ ₹7,500/g (22K) | ₹1,50,000 + ₹21,000 making | ₹1,50,000 + ₹13,980 making |
| GST 3% | on ₹1,71,000 = ₹5,130 | on ₹1,63,980 = ₹4,919 |
| Total | ₹1,76,130 | ₹1,68,899 |
Same gold, ₹7,200 apart. Rules of thumb: machine-made chains and coins should carry the lowest making (3–8%); heavy bridal/antique/temple work runs 15–25%. Making charges are pure cost — no jeweller pays them back on resale. Always ask for the making charge in writing before weighing sentiment.
“Wastage” (ghat) charges are a legacy add-on some jewellers still slip in at 2–8% — with modern machine manufacturing there is little genuine wastage. Treat any wastage line as negotiable to zero, or shop elsewhere.
The bill: your resale value lives here
- Jeweller’s GSTIN, date, and HUID of each piece on the invoice.
- Separate lines: gold rate/gram, net gold weight, making charges, stone charges (stones billed separately — never pay gold rate for stone weight), GST.
- Purity stated (22K916 etc.) matching the stamp.
- Buyback/exchange policy printed or stamped — the good jewellers commit to 100% of gold value on own-store exchange.
- Payment: card/UPI/transfer. Cash ≥ ₹2 lakh for a single purchase triggers the 269ST penalty zone, and PAN is required for high-value purchases anyway.
Old-gold exchange: where savings evaporate
- Insist on testing in front of you — XRF machine reading, not “experience”.
- Purity deduction games: your 22K916 hallmarked old piece should be valued at 91.6% — not an arbitrary “20K hoga”. Hallmarked old gold leaves no room for that haircut.
- Melting/refining deduction of 2–6% is common on non-hallmarked old pieces; on hallmarked ones, push for zero–2%.
- Exchange vs sell: exchanging within the same jeweller usually gets full rate; selling for cash gets shaved. If the new purchase is large, exchange first, negotiate making second.
- Tax note: selling/exchanging old gold is a capital-gains event — 24-month holding for 12.5% LTCG; inherited gold takes the original owner’s cost. Keep old bills.
Coins vs ornaments vs paper
Buying for investment? Coins/bars carry the least making (and banks’ coins can’t be sold back to banks — buy from jewellers instead). But every physical route pays 3% GST at entry and loses making at exit; Gold ETFs and the SGB secondary market skip both. Buy ornaments for wearing, paper for investing — mixing the two goals is the expensive mistake.
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FAQs
Is un-hallmarked jewellery illegal to own?
No — the mandate applies to what registered jewellers sell. Your older pieces are fine to hold, and can be hallmarked/tested when selling.
Do making charges apply on coins?
Yes, but far lower (often 2–6% or a small flat fee). Compare across jewellers; avoid bank coins due to no buyback.
Can I claim GST back when I sell?
No — consumer GST on jewellery is a sunk cost. Another reason physical gold underperforms paper gold for pure investment.
22K or 24K for jewellery?
Ornaments need alloying strength → 22K/18K. 24K is for coins/bars. Never pay 24K rate for 22K jewellery — check the day’s 22K board rate.
Related: SGB vs digital gold vs ETF · All gold investment options · Cash transaction limits
General information. Hallmarking rules per BIS framework as of September 2026; rates in examples are illustrative.
Credit Smart India · IG: @creditsmart.in · FB/YT: @creditsmartindia · Last updated: September 2026
