Old gold exchange billing: how to value it and show it on the bill

What old gold exchange means at the counter

A customer brings in an old chain, a broken bangle or earrings they no longer wear, and wants new jewellery for it. You value the old gold, take that value off the new bill, and the customer pays the rest.

Arguments at the counter are nearly always about the weight, the purity or the rate. If staff explain each step the same way every time, and the bill shows it in writing, most of them never begin.

Only the gold is valued. Making charges and stones on the customer’s original bill are not part of it. Say this early and kindly.

Step 1: weigh it properly

• Use a calibrated scale and show the reading. Weigh in front of the customer, to the milligram. Turn the screen towards them.
• Remove what isn’t gold. Take out stones, beads, lac, wax, thread and any hooks that are not gold, or weigh them separately and subtract them. Write down both the gross weight and the weight you are valuing.
• Weigh before you test. Testing a sample can remove a tiny amount of metal, so record the weight first.

Step 2: test the purity

Purity is what decides the value, and a hallmark is the best starting point. On hallmarked gold the purity is stamped on the piece: 916 means 91.6% gold, the usual mark on 22K. Pieces hallmarked since July 2021 also carry a 6-character HUID, and anyone can check it with “Verify HUID” in the BIS CARE app, which shows the purity and type of article it was hallmarked as.

Older hallmarked jewellery without an HUID is still common in customers’ homes. The government’s notice of March 2023 that stopped jewellers selling gold without an HUID also said that hallmarked jewellery lying with consumers under the old schemes stays valid. So an old four-mark hallmark is still a fair guide; test it anyway before you agree a value.

Unmarked pieces need testing. Shops commonly use the touchstone (kasauti) or an XRF machine, which reads the metal without damaging it. Test more than one spot on soldered or hollow pieces. If a customer doubts your result, they can have the piece tested at any BIS-recognised assaying and hallmarking centre for a fee.

Step 3: fine weight and the old-gold rate

Fine weight is the pure gold inside the piece: weight × tested purity. A 12.200 g chain that tests at 91.6% has 12.200 × 0.916 = 11.175 g of fine gold.

Then value the fine weight at your own old-gold rate for the day. This rate is usually below your selling rate, because old gold has to be melted and refined before it can be used again. Set it every morning alongside your 24K, 22K and 18K rates, and give every customer that day the same rate.

Try it with your own figures on the free old gold exchange calculator, which shows the fine gold first and then the value. The gold purity and karat converter helps when a customer quotes karat and you work in percent, and the fine gold (tunch) calculator gives the fine weight from any tunch.

Deductions: say them before you agree the price

Some shops take something off for melting loss, testing or refining. Others build that into a lower old-gold rate and take nothing more off. Either way can be fair. What causes trouble is a deduction the customer hears about only at the end.

Choose one way for your shop and use it every time. If you deduct, say the percentage or the grams before you agree the value, and write it on the slip and the bill.

Showing old gold exchange on the GST bill

Gold jewellery carries 3% GST: 1.5% CGST and 1.5% SGST within your state, or 3% IGST when the customer is from another state. The government’s GST FAQ for gems and jewellery says the 3% is on the total value of the piece, whether making charges are shown separately or not.

The usual question is whether GST is on the new jewellery’s full value or only on what the customer pays after the exchange. The GST valuation rules say that when part of the payment is not money, the sale is valued at its normal price. The official example is a new phone sold with an old phone in exchange: the value is the new phone’s price without the exchange. Read the same way, GST on the new jewellery is on its full value, and the old gold is part of how the customer pays. There is no CBIC circular on jewellery exchange itself, so agree the treatment with your CA and bill the same way every time. Our GST guide for jewellery shops covers the rest.

A clear exchange bill shows the new piece line by line with weight, purity, HUID, making and stones, then the total with GST. Below that comes the old gold on its own line, with its weight, tested purity, fine weight and rate, and finally the amount the customer still has to pay.

Records to keep for every piece you take in

• An old gold slip or line on the bill: date, customer name and phone, what the piece is, gross weight, weight valued, tested purity, fine weight, rate, any deduction and the value.
• How it was tested: touchstone, XRF or a hallmarking centre report, and the HUID if the piece has one.
• Where it went: into your old-gold stock, then to the refiner or karigar. Your old-gold stock should match what you took in, less what you sent out.
• The bill number it went against, or a purchase record if you bought it outright for cash or a bank transfer. Ask your CA about limits on large cash payments and what ID to take from the customer.

How CaratOS handles old gold exchange

• On the same bill, on every plan. Add the customer’s old gold or silver to the bill. Enter the weight and tested purity, and CaratOS works out the fine weight, values it at your old-gold rate for the day and takes it off the amount to pay.
• Your rate, set each morning. Old gold sits in today’s rates with 24K, 22K, 18K and silver. Every new bill uses these rates.
• Bought on its own. When a customer sells old gold without buying anything, record it as a purchase on its own, on every plan.
• Old-gold stock. The old gold joins your old-gold stock when the bill is finished. Growth adds the metal book, bhav cut and old gold refining.
• Money and sharing. Split what is left across cash, UPI and card, and share the GST bill on WhatsApp or email, print it on A5 or save it as a PDF.
• Customer history. Each customer’s bills, old gold and dues sit in one place, with their KYC documents kept private.
• Your CA. A free read-only login for your CA or munim, GST figures for GSTR-1 and GSTR-3B, and Tally export on Starter. Growth adds Tally live sync.
• See it step by step on Billing and old gold, and plans on pricing: Starter ₹1,199 a month, Growth ₹3,999 a month or ₹42,999 a year, GST included.

What CaratOS doesn’t do today

CaratOS doesn’t do girvi (gold loans) or RFID, and there is no Android app: it runs in the browser on your phone, tablet or computer, so the counter needs an internet connection. CaratOS Desktop is coming soon. If your shop shows a melting or testing deduction as its own line on the bill, ask us in the demo how it fits.

Try it with a real exchange from your counter

Book a demo and bring one real exchange from last week: the new piece, the old gold, its purity and how the customer paid. We will make that bill in CaratOS in front of you. A 15-day Starter trial is available on request, starts when CaratOS approves it, and needs no card. Read the jewellery billing software guide for what else to check.

Questions shop owners ask