Walk into almost any jeweller in India and you will find some version of the same product at the counter: a monthly savings scheme. The customer pays a fixed amount every month for eleven months, you add the twelfth, and at maturity they walk out with gold worth more than they put in. It is the single most reliable way a neighbourhood jeweller locks in a customer for a full year. It is also the product most likely to quietly put you on the wrong side of company law if you run it on a notebook and a handshake.
What the '11+1' actually is
The mechanics are simple. A customer commits to, say, 5,000 rupees a month for eleven months — 55,000 rupees of their own money. At maturity you either add one month's installment yourself (the '+1'), or give an equivalent discount on making charges, and they redeem the full value in jewellery. Some shops lock the gold rate at the first installment, some at redemption, some average it across the year. Whatever the variant, the promise is the same: save with us for eleven months and we will sweeten the twelfth.
The line between an 'advance' and a 'deposit'
Here is the part most counters never think about. When a customer hands you money every month against future gold, the law has to decide what that money is. If it is an advance for goods you will deliver, you are fine. If it looks like a deposit — money you are holding and will repay, possibly with a return — you have walked into the Companies (Acceptance of Deposits) Rules, 2014, which most small jewellers are in no position to comply with.
The rule that saves the scheme is Rule 2(1)(c)(xii). In plain English: an advance received for the supply of goods is not treated as a deposit, as long as it is appropriated against that supply within 365 days of receipt. That single line is the reason schemes run for eleven months and not thirteen. Collect the installments, deliver the gold inside a year, and the money stays an 'advance for goods'. Let a scheme drift past 365 days, start paying interest on it, or let a customer roll it over indefinitely, and you risk that money being reclassified as a deposit you were never permitted to accept.
The consequences are not theoretical. Deposits accepted in breach of the rules can attract penalties and repayment orders. On the other side, the Bombay High Court has looked at jeweller schemes and treated a genuine, voluntary scheme as an ordinary commercial transaction — precisely because it was structured as an advance for goods, not a deposit. The structure is what protects you. A scheme that quietly becomes 'give us money and we will give it back with a bonus' loses that protection.
The GST question everyone gets nervous about
The second worry is GST. Do you charge tax every month as installments come in? No. GST on gold jewellery is a tax on the supply — it applies when the customer actually redeems and you hand over the piece, currently at 3% on the gold value plus 5% on making charges. Advances received for goods do not attract GST at the moment of receipt, so your monthly collections are not taxable events. What matters is that the final redemption is invoiced correctly, with making charges shown separately, and that the scheme money is visibly linked to that final bill.
The ledger that survives a raid
All of this is fine on paper. It falls apart in a notebook. If a scheme member disputes how much they paid, or an inspection asks you to show that every rupee collected was appropriated against gold within the year, you need a per-member trail — not a diary and your memory. A raid-proof scheme ledger tracks, for every single member:
- KYC, contact details and the exact scheme variant they joined
- Every installment: amount, date, payment mode, and running total
- The maturity date, with a hard stop before the 365-day line
- Whether the gold rate is locked, floating or averaged — recorded, not remembered
- The redemption invoice, with gold value and making charges split for GST
- The '+1' benefit or discount actually given, tied to that member
When that trail exists for everyone, a scheme audit becomes a five-minute export instead of a week of panic. When it does not, you are one dispute or one inspection away from a very bad month.
A gold scheme is not risky because it is complicated. It is risky because it is usually run on trust and a notebook, and trust does not reconcile.
How we built this into BizRevolt
We will be straight about where we fit. Plenty of jewellers run schemes on Marg, on Tally, or on a local desktop tool, and those handle billing perfectly well. What they rarely do is treat the savings scheme as a first-class, compliance-aware object. That is the gap BizRevolt's Jewellery workspace is built for. Schemes are a module, not a spreadsheet: every member gets a ledger, maturity is capped inside the 365-day window automatically, redemption pulls the HUID-tagged piece and raises a GST-correct invoice with making charges split out, and the whole thing sits inside an audit trail you can hand to a CA without flinching.
It is the same philosophy across the rest of the counter — rate-of-the-day billing, weight-priced POS, old-gold exchange and per-piece HUID stock — but the scheme is where the compliance risk is highest and the tooling has historically been weakest.
BizRevolt's Jewellery plans start at 1,499 rupees a month for the Counter tier, 3,999 for Growth, and 7,999 for a multi-branch Chain — a fraction of what a mishandled scheme can cost you in penalties or goodwill. If you want to see how your existing scheme would map into it, the fastest thing to do is ask. Message the founder on WhatsApp, or call +91 91 0657 4865, and we will walk through your specific setup — no scripted demo, just an honest look at whether it fits.
Image credit: Jlgoldpalace, CC BY-SA 4.0, via Wikimedia Commons.