Jewellery & Multi-Store Retail Accounting Entries: Complete Guide to GST, Metal Exchanges & Karigar Ledgers

1. Standard Double-Entry Accounting for Jewellery Retail Sales

A standard jewellery tax invoice comprises multiple distinct components: metal value based on net fine weight and the published daily bullion rate, making charges (labour), studded precious stones (diamonds, gemstones), and applicable GST. Under Indian GST law, finished jewellery attracts 3% GST (1.5% CGST + 1.5% SGST, or 3% IGST for interstate transactions).

• Debit: Customer Account / Cash / Bank / POS Terminal (Total Invoice Consideration)
• Credit: Jewellery Sales Account (Net Metal Value + Stone Value)
• Credit: Making Charges / Labour Income (HSN 7113 / SAC 9988)
• Credit: CGST Payable (1.5%) & SGST Payable (1.5%)

2. Accounting for Old Gold Purchase & Metal Exchange (Section 15)

When a customer exchanges old scrap gold towards the purchase of new jewellery, many traditional software packages simply subtract the old gold value from the invoice subtotal. This is a severe statutory compliance error. Under GST rules, the sale of the new ornament and the purchase of old scrap metal are two independent transactions for tax valuation purposes.

• Transaction 1 (Sale of New Jewellery): Raised for the full gross consideration with 3% GST charged on the complete retail value.
• Transaction 2 (Old Gold Purchase): The retailer raises an Inward Purchase Voucher recording gross weight, tested melting purity, net fine weight, and purchase rate.
• Payment Settlement: The credit arising from the Purchase Voucher is applied against the outstanding receivable of the Sales Invoice in the payment ledger.

3. Karigar Job Work, Purity Custody & Wastage Reconciliation

Subcontracting jewellery manufacturing to karigars (artisans) requires tracking two distinct balances simultaneously: a pure metal custody balance and a financial rupee balance. When 24K bullion or 22K gold grain is issued to a karigar for ornament fabrication:

• Issue Entry: Debit Karigar Metal Custody Account (Fine Grams) | Credit Raw Material Gold Stock (Fine Grams).
• Receipt Entry: Debit Finished Jewellery Stock (Net Weight + Hallmarked Karat) | Credit Karigar Metal Custody Account (Gross Weight received).
• Wastage Settlement: Permissible wastage (ghat) is credited to the karigar and debited to Manufacturing Loss Account based on pre-contracted agreement terms.
• Making Charges Payment: Debit Making Charges Expense | Credit Karigar Cash/Bank Ledger after deducting statutory TDS under Section 194C where applicable.

4. Automated GST E-Invoicing (IRN) & Double-Entry Invariance in Vowerole

In legacy desktop systems, accounting ledgers drift because users can edit transactions after invoices have been printed. Vowerole enforces mathematical ledger invariance: confirmed documents post irrevocable, append-only journal entries directly into the general ledger. B2B wholesale invoices and eligible retail transactions communicate directly with the government NIC portal via secure APIs, stamping signed IRN hashes and QR codes onto thermal and A4 invoices within 300 milliseconds.