Gold/Jewellery Sale Agreement (Pakistan)

A Gold/Jewellery Sale Agreement in Pakistan governs the arrangement between the parties and the conditions on which it operates.

The Sale of Goods Act 1930 is the primary statute governing contracts for the sale of movable property in Pakistan. Under Section 4 of the Sale of Goods Act 1930, a contract of sale is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a price. Section 12 of the Sale of Goods Act 1930 provides implied conditions as to quality, including that where the seller deals in goods of that description, there is an implied condition that the goods are of merchantable quality. In the context of gold jewellery, this means the seller implicitly warrants that the gold is of the purity stated and that the jewellery is free from hidden defects that would make it unfit for use or unsaleable at the stated purity.

Gold and jewellery transactions in Pakistan are deeply embedded in cultural, economic, and social practices. Gold jewellery — locally called zewar — serves not only as personal adornment but as a primary store of wealth and a traditional component of a woman's mehr (dower) in Islamic marriage under the Muslim Family Laws Ordinance 1961, and as a significant asset in inheritance distributions under Islamic succession law (faraid). The gold market in Pakistan is centred in major jewellery bazaars — the Sarafa Bazaar in Karachi (one of the largest gold markets in Asia), Urdu Bazaar and Anarkali in Lahore, and similar markets in Islamabad, Peshawar, and Quetta. The All Pakistan Sarafa Gems and Jewellery Association (APSGJA) represents the organised jewellery trade.

Gold purity in Pakistan is traditionally measured in carats — 24 carat being pure gold (99.9% purity), 22 carat (91.7% gold content) being the standard for most Pakistani jewellery, 21 carat (87.5%), and 18 carat (75%) for more durable pieces. The tola is the traditional Pakistani unit of weight — one tola equals 11.664 grams — and is widely used in the jewellery trade alongside grams. Pakistan does not yet have a mandatory hallmarking system equivalent to the UK's Assay Office hallmarking under the Hallmarking Convention, though the Pakistan Standards and Quality Control Authority (PSQCA) has developed voluntary standards for gold and silver articles. The absence of mandatory hallmarking means the buyer often relies on the seller's verbal representation of purity, making a written Gold/Jewellery Sale Agreement with explicit purity warranties essential for significant transactions.

The Federal Board of Revenue (FBR) has increasingly focused on the gold and jewellery sector as part of its documentation and tax enforcement drive. The Finance Act 2019 and subsequent FBR circulars require jewellers to register with the FBR as retailers and to collect withholding tax from non-filer buyers under the Income Tax Ordinance 2001. Large jewellery transactions — typically above PKR 100,000 — may require the buyer's CNIC under FBR's point-of-sale documentation requirements, and the Gold/Jewellery Sale Agreement serves as the documentary evidence for both parties' tax records.

A Gold and Jewellery Sale Agreement in Pakistan is required in all significant gold and jewellery transactions where the parties need written evidence of the terms of sale.

A Gold/Jewellery Sale Agreement is needed when a family sells gold jewellery inherited from a deceased relative — rings, necklaces, bangles, earrings, or gold coins — to another family member or to a jeweller. The written agreement documents the weight, purity, agreed price, and payment, protecting both seller and buyer and providing a clear record for inheritance and tax purposes.

A Gold/Jewellery Sale Agreement is required when a woman sells her personal zewar (gold jewellery held as mehr or personal savings) to a jeweller or a private buyer. The written agreement confirms the seller's voluntary consent and the agreed terms, which is particularly important in family or marital disputes where jewellery ownership is contested under the West Pakistan Muslim Personal Law (Shariat) Application Act 1962.

A Gold/Jewellery Sale Agreement is needed when a jewellery retailer or goldsmith purchases gold articles from a customer for re-melting, resale, or redesign. The written agreement serves as the jeweller's purchase record for FBR compliance and protects the jeweller against future claims that the jewellery was sold under duress or at an undervalue.

A Gold/Jewellery Sale Agreement is required when a bullion trader in the Sarafa Bazaar sells gold bars or coins — including Pakistani sovereign gold coins and internationally recognised gold coins such as South African Krugerrands, American Eagles, or UAE gold bars — to an investor or collector. The agreement documents the exact weight, assay purity, and price per gram or per tola.

A Gold/Jewellery Sale Agreement is needed when a wholesale jewellery manufacturer sells a consignment of finished jewellery to a retailer. The agreement specifies the making charges (labour cost per gram), the gold cost component, the stone values (for diamond or gemstone-set pieces), total invoice value, and payment terms.

A Gold/Jewellery Sale Agreement is required when an individual borrows money from a pawnbroker (generally called an arhtia in local markets) using gold jewellery as collateral, and the arrangement involves a conditional sale — the gold is sold with a right of repurchase within a specified period upon repayment of the loan amount.

A valid Gold and Jewellery Sale Agreement in Pakistan under the Sale of Goods Act 1930 must contain the following essential elements.

Party Identification: Full legal names, CNIC numbers (NADRA-issued, 13-digit format XXXXX-XXXXXXX-X), and addresses of the seller and the buyer. For transactions involving registered jewellers, the seller's National Tax Number (NTN) from the Federal Board of Revenue (FBR) and SECP registration (if a company) should be included. FBR's point-of-sale documentation requirements may necessitate recording the buyer's CNIC for transactions above prescribed thresholds.

Item Description: A precise description of each jewellery item being sold — type of item (necklace, bangles set, ring, earrings, bracelet, tikka, gold bar, or gold coin), the metal type (yellow gold, white gold, rose gold, silver, or platinum), purity (expressed in carats — 24K, 22K, 21K, 18K — or percentage purity — 99.9%, 91.7%, 87.5%, or 75%), weight in grams and tolas, the design description, and any gemstones (type, number, estimated carat weight, and quality grade if assessed).

Weight Certificate Reference: Where the transaction involves a significant amount, reference to the weight certificate issued by a certified weighing scale tested and stamped by the Weights and Measures Department of the relevant provincial government under the Weights and Measures Act 1976 (or its successor legislation). The use of a certified scale and an independent weight certificate protects both parties against disputes about the actual gold weight.

Price and Payment: The agreed sale price in PKR per tola or per gram (cross-referenced to the current Karachi Sarafa rate or the APSGJA published daily rate), the total consideration for all items, the mode of payment (cash, bank transfer, pay order, or cheque — noting that transactions above PKR 500,000 in cash may attract FBR reporting requirements under the Anti-Money Laundering Act 2010), and the date of payment.

Purity Warranty: The seller's express warranty that the gold is of the stated purity, that the articles are free from hidden defects that would reduce their commercial value, and that the seller has clear title to the jewellery and is not selling any stolen or encumbered property. The buyer's right to have the gold independently tested for purity (by a certified assayer or at the Sarafa Association testing facility) before or after purchase, and the seller's obligation to refund if the tested purity is materially lower than warranted.

Transfer of Ownership and Delivery: Confirmation that ownership of the jewellery passes to the buyer on payment of the agreed price (Section 19 of the Sale of Goods Act 1930 — property passes when the parties intend it to pass), and a description of how physical delivery of the items will occur — immediate handover, delivery on full payment, or insured courier delivery.

Making Charges and Stone Values (for new jewellery): Where the gold items are newly manufactured jewellery purchased from a jeweller, a separate breakdown of the gold cost (weight × prevailing gold rate per tola), the making charges per gram (labour), and the value of any precious stones set in the jewellery is important for both parties' records and for FBR compliance purposes.

Forms-legal.com provides this Gold/Jewellery Sale Agreement (Pakistan) template for individuals and businesses involved in gold and jewellery transactions. For high-value transactions involving diamond or gemstone jewellery, parties should obtain a certified gemological appraisal from a qualified gemologist accredited by the Gemological Institute of America (GIA) or a Pakistani equivalent before signing.

Under Pakistani law, the Muslim Family Laws Ordinance 1961 governs Muslim marriage (nikah), divorce (talaq), maintenance, and dower (mehr). The Family Courts Act 1964 establishes Family Courts with jurisdiction over matrimonial disputes. The National Database and Registration Authority (NADRA) issues CNIC, NICOP, and birth/death certificates. The Guardian and Wards Act 1890 governs child custody. The Federal Shariat Court reviews laws for Islamic compliance.