Reconciliation Software for Indian Jewellers

Jewellery reconciliation software built for India ties together six surfaces that no horizontal accounting or ERP tool covers natively: (1) mixed-rate GST invoicing where a single invoice line carries 3% on gold value, 5% on making charge and 18% on studded diamond or gemstone components — CBIC Notification 05/2017-CTR read with the 03/2018-CTR making-charge notification; (2) karigar and job-worker payments classified between job-work (Section 393(1) with the applicable payment code) and purchase-of-goods (Section 194Q at 0.1% over the ₹50 lakh threshold with buyer turnover above ₹10 crore); (3) old-gold trade-in valuation under Rule 32(5) of the CGST Valuation Rules — the margin scheme — where GST applies only to the value addition, not the full retail price; (4) metal-loan settlement under the RBI Gold Metal Loan (GML) framework, tying the fixed leg (physical gold delivery) against the floating leg (price on the interest date) at pool-account level; (5) BIS hallmarking cost pass-through under the Hallmarking of Gold Jewellery and Gold Artefacts (Amendment) Order 2021, including HUID tracking against Assaying and Hallmarking Centre invoices; and (6) high-value cash walk-in receipts under Section 269ST (₹2 lakh limit) and PAN capture threshold rules. TransactIG classifies each line item by the relevant rule, section or notification and produces a single audit-defensible variance file per surface.

The mixed-rate mechanic is the defining feature of Indian jewellery GST. Gold jewellery attracts 3% under CBIC Notification 05/2017-CTR (HSN 7113); making charges attract 5% under CBIC Notification 03/2018-CTR when billed separately (or 3% when embedded in the composite supply — the composite-vs-mixed determination itself is a reconciliation surface); studded diamonds or coloured gemstones attract 3% but stone-only components and packaging attract 18%. A single retail invoice for a diamond-studded gold necklace legitimately carries three tax lines against three HSN codes and three rates. Point-of-sale software often collapses these into a weighted-average line or misclassifies the making charge, breaking GSTR-1 outward supply and creating downstream ITC mismatches for B2B buyers. TransactIG splits every invoice into its component tax lines against the correct HSN, ties each line to the notified rate on the date of supply, reconciles POS-line-level output against GSTR-1 filed and against GSTR-2B ITC available to the customer, and flags composite-vs-mixed supply classification issues before the return is filed. The audit output is a per-invoice tax-line variance file consistent with the working-paper discipline the Institute of Chartered Accountants of India (ICAI) expects on jewellery GST audits.

Karigar payments sit at the boundary between three treatments and the classification is the reconciliation surface. If the karigar supplies pure labour on the jeweller's gold (a classic job-work relationship where title in the gold never passes), the payment is job-work under Section 393(1) of the Income-tax Act 2025 (payment code corresponding to legacy Section 194C, currently at 1% for individual/HUF and 2% for other payees, over the applicable per-transaction and aggregate thresholds). If the karigar buys gold, adds value and sells the finished piece back — title passes twice — the payment can be re-characterised as a purchase of goods under Section 194Q at 0.1% (when the buyer's turnover exceeded ₹10 crore in the prior year and per-seller purchases in the year exceed ₹50 lakh). Where the karigar is a registered dealer supplying under GST, the tax rail switches again to CGST provisions. TransactIG classifies every karigar payment against contract type, gold-supply flow and PAN-linked cumulative payment history, and produces a per-karigar TDS working paper with the section applied, the rate applied and the exception cases flagged for tax-team review — the same evidence discipline that tax audit reports under Form 3CD Clause 34(a) require.

Old-gold trade-in is one of the two or three most-litigated jewellery GST clauses. Rule 32(5) of the CGST Valuation Rules — commonly called the margin scheme — provides that where a dealer buys second-hand goods and sells them after minor processing that does not change the nature of the goods, GST applies only to the difference between the sale price and the purchase price (the margin), not the full sale value. In practical retail, a walk-in customer trades in a 20g old gold chain against a new 25g necklace; the jeweller credits the trade-in value, invoices only the net addition and reports the margin under Rule 32(5). The reconciliation problem is that POS systems often invoice the gross new-piece value and separately credit the trade-in as a return, producing a GSTR-1 outward supply figure that does not match Rule 32(5) treatment. TransactIG tags every retail transaction with a trade-in flag, computes the Rule 32(5) margin, ties the reported outward supply on GSTR-1 to the margin-scheme mechanic, and produces the assay/purity certificate reference and old-gold weight audit trail for statutory audit. Where Rule 32(5) is misapplied (e.g., trade-in from a registered dealer where the input tax credit rail should have been used instead), the classification flag surfaces before the return is filed.

A Gold Metal Loan (GML) under the RBI framework is denominated in physical gold — the jeweller receives, say, 5 kg of gold from a nominated bank (SBI, ICICI, HDFC, Kotak, Federal Bank, IndusInd, or one of the RBI-nominated bullion importers), fabricates jewellery, sells it, and settles the loan by returning either physical gold or cash equivalent at a fixed price date. The reconciliation is dual-leg: the fixed leg tracks gross weight, purity (995 fineness for standard gold, 999 for pure) and physical delivery against the bank's gold pool account; the floating leg tracks the interest (typically LIBOR-plus in USD terms or an equivalent MCLR-plus INR rate) and the price-fixing event where gold is booked at LBMA AM/PM fix or the equivalent MCX benchmark. Rupee working-capital loan reconciliation ties a single principal against interest and repayment — one dimension. GML reconciliation ties two dimensions: physical gold weight against the pool account, and price fixing against the notional principal at settlement. TransactIG ingests bank pool-account statements alongside the jeweller's fabrication ledger, ties the fixed leg at weight/purity level and the floating leg at fix-date level, and produces the RBI-audit-defensible reconciliation the treasury and statutory audit teams need.