When a jeweller gives gold to a karigar (goldsmith) to make jewellery, the account is kept in fine gold, the pure 24K content, not in grams of 22K or 18K. Getting the touch and wastage right on every issue and receipt is what keeps the karigar's balance honest on both sides.
Three words to agree on first
- Touch (tunch): the purity as a percentage. 22K is 91.6 touch, 18K is 75, 14K is 58.5. Fine gold = weight × touch ÷ 100.
- Wastage: the extra gold allowed to the karigar for metal lost while making, usually agreed as a percentage of the weight or as extra touch.
- Labour (majuri): the making charge paid in money, per gram or per piece.
Issuing gold to the karigar
Record what goes out in gross weight, touch and fine weight:
| Issued | Weight | Touch | Fine gold |
|---|---|---|---|
| Fine gold bar | 50.000 g | 99.5 | 49.750 g |
| Old gold (melted) | 20.000 g | 91.6 | 18.320 g |
| Total issued | 68.070 g |
Receiving the finished work
The karigar returns 22K chains weighing 72.000 g. Agreed wastage is 3% of the weight, and labour is ₹350 a gram.
| Line | Calculation | Fine gold / money |
|---|---|---|
| Fine gold in the work | 72.000 × 91.6 ÷ 100 | 65.952 g |
| Wastage allowed | 72.000 × 3% × 91.6 ÷ 100 | 1.979 g |
| Credited to the karigar | 67.931 g | |
| Fine gold still with the karigar | 68.070 − 67.931 | 0.139 g |
| Labour payable | 72.000 × ₹350 | ₹25,200 |
Some workshops express wastage as extra touch instead, for example billing 22K work at 94.6 touch instead of 91.6. That is the same idea: 3 touch points on 72 g is 2.16 g of fine gold. Write down which method you use; mixing them is the most common source of disputes.
Keeping the balance right
- One ledger per karigar, with two balances: fine gold and money.
- Every issue and receipt dated, with weight, touch and fine weight.
- Test the touch of returned work on a sample basis, and record the result.
- Settle small fine-gold differences regularly, in metal or at the day's rate, and note how.
- Link each job to the customer order it was made for, so the order shows where the piece is.
GST on karigar work
When a registered karigar charges a jeweller for job work on gold supplied by the jeweller, the labour is a job-work service. The CBIC FAQ on gems and jewellery lists job work in relation to jewellery at a 5% rate, while the retail sale of the finished jewellery is at 3%. Confirm the current rates and how your karigar invoices with your CA.
Infovion JMS sends a job to the karigar with the metal issued in gross and fine weight, receives the work with touch, wastage and labour, and keeps each karigar's account in fine gold and money. A job can be linked to the customer's order. See orders and karigar in JMS.
Source: CBIC sectoral FAQ: Gems and Jewellery. Figures in the examples are for illustration.
