Old-gold exchange is the most ordinary thing that happens at a jewellery counter, and one of the easiest to get quietly wrong. A customer walks in with a set they bought fifteen years ago, wants to put it towards a new necklace, and expects a fair price for the metal. You weigh it, test it, agree a value, and adjust the bill. Nothing about that feels like a compliance event — and that is exactly why it becomes one.
The mistakes are rarely dramatic. They are small entries that never get made, a GST assumption that feels obvious but is wrong, and an old-gold value that gets netted against a new sale in a way the law does not allow. None of it shows up on the day. It surfaces later, in an assessment, an audit, or a stock reconciliation that simply refuses to tie out. This is a plain-English walk through how to do old-gold exchange straight: the valuation, the GST, and the one stock entry most counters skip.
The valuation is a promise you should be able to reproduce
Fair valuation starts with honest testing — touchstone, karat meter or XRF — and a rate you can point to. The customer is trusting you on two numbers they cannot easily check: the purity of their old metal and the rate you are applying to it. A valuation you can reproduce a month later is the difference between a repeat customer and a WhatsApp screenshot doing the rounds. Record the gross weight, the net weight after any deductions for stones or soldering, the assessed purity, and the rate of the day you applied. Not a single lump-sum figure — the working behind it.
The GST rule that trips up honest shops
Start with the relief. When a customer who is an individual — not a dealer — sells you their personal old gold, you do not owe GST under reverse charge on that purchase. The CBIC clarified this early in GST: an individual disposing of their own jewellery is not making a supply in the course or furtherance of business, so there is no reverse-charge liability on the jeweller. It is worth knowing precisely, because it gets misremembered in both directions — some shops wrongly pay RCM on every old-gold intake, others wrongly skip recording the purchase at all.
The trap is on the other side of the counter: the new sale. When old gold is exchanged towards a new piece, GST applies to the full value of the new jewellery — not the new value minus the old metal. You cannot net the exchange. Gold is taxed at 3% and making charges at 5%, and the taxable value is the whole new article. The clean way to bill an exchange is to treat it as two facts that happen to share a customer: a new sale at full value with correct GST, and an old-gold purchase recorded separately against it.
If you resell that old gold, the margin scheme exists for a reason
Rule 32(5) of the CGST Rules lets a registered dealer who resells second-hand goods pay GST on the margin — sale price minus purchase price — instead of the full value, provided no input tax credit was taken on that purchase. For old gold you buy from a consumer and resell as-is, this stops the same metal being taxed in full twice. The moment you melt it into new stock, different rules apply. So the question "did this piece get resold as-is, or melted down?" is not academic — it decides how the tax is computed, and your records should answer it without anyone having to remember.
The stock entry most counters skip
Here is where the money quietly goes missing. A clean old-gold intake is not a rupee figure — it is a metal record. At minimum it should capture:
- Date, customer, and whether they are a consumer or a registered dealer — this alone decides your RCM position
- Gross weight, net weight after deductions, and assessed purity (for example 18.4g at 91.6%), not a single lump value
- The rate of the day applied and the metal value it produces
- Whether the piece enters stock as-is for resale, or goes for melting and refining
- The onward path: resold under the margin scheme, or melted into karigar job-work
- HUID status, if the old piece is being re-hallmarked into a new article
The reason to record weight-and-purity rather than a rupee figure is simple: gold is inventory, not cash. If old metal enters your books as "₹80,000 received" instead of "18.4g at 91.6% assessed," your physical metal stock and your financial stock start to drift apart, and every reconciliation after that becomes guesswork. Multiply one careless entry a day across a year and you have a stock position nobody can defend.
Where Tally, Marg and simple billing apps leave you
Tally is dependable general accounting, and plenty of jewellers run it — but it does not know the rate of the day, purity assessment, or the two-sided nature of an exchange. You end up keeping the real jewellery logic in a side register and hoping the two agree at month-end. Marg is feature-rich and long-established, but largely desktop-bound, which means the counter, the karigar and the accountant are often looking at different copies of the truth. myBillBook and similar apps are quick and clean for a GST invoice, but they are not built for weight-priced stock, old-gold intake, or HUID-tagged reconciliation. None of these are bad tools. They are simply not built around the way metal actually moves through a shop.
Old gold is not a discount on a new sale. It is a purchase and a sale that happen to share a customer — and your books should show both.
What re-hallmarking adds after 1 April 2023
Since the sale of gold jewellery without a six-digit alphanumeric HUID was prohibited after 31 March 2023, the hallmark now carries three marks: the BIS logo, the purity, and that HUID. When old gold is melted and made into a new article, the new article needs its own hallmarking and HUID before it can be sold, and any customer can verify it in the BIS CARE app. For your records that means the old-gold intake and the new-article HUID are two ends of a single story. Keeping them linked is what lets you answer, calmly, where any given gram came from.
How BizRevolt handles old-gold exchange
BizRevolt is built for the counter rather than adapted to it. An exchange is recorded as exactly what it is — an old-gold purchase with gross weight, net weight, assessed purity and the day's rate, alongside a new sale billed at full value with 3% on metal and 5% on making. No illegal netting, GST computed correctly on both legs. The old piece enters metal stock by weight and purity with a clear onward path, whether that is resale under the margin scheme or melting into job-work for a karigar, so your metal ledger and your financial ledger stay in step.
Because it is cloud-based, the counter, the workshop and the accountant see the same record, whether you run a single showroom or a chain. Rate-of-the-day, weight-priced billing, HUID-tagged stock and old-gold intake live in one system instead of four disconnected habits. Plans start at ₹1,499 a month for a single counter, ₹3,999 for a growing shop, and ₹7,999 for multi-branch chains — a fraction of what one disputed assessment or one stock that will not reconcile can cost you.
If you want to see how your own exchange flow would look, the fastest route is a real conversation. Message the founder on WhatsApp and you will usually hear back within about fifteen minutes, or call +91 91 0657 4865 and we will walk through it with you — no pressure, no marathon demo, just a straight look at whether it fits your shop.