Explainer | What is hallmarking of gold jewellery?

The Bureau of Indian Standards (BIS) is the designated authority to implement hallmarking of gold jewellery and this move is expected to bring transparency in the jewellery trade and increase trust among consumers

The government has made hallmarking of gold jewellery mandatory in India from June 16, 2021. This comes two decades after gold hallmarking was introduced in India on a voluntary basis.

The Bureau of Indian Standards (BIS) is the designated authority to implement hallmarking of gold jewellery and this move is expected to bring transparency in the jewellery trade and increase trust among consumers.

What is hallmarking of gold jewellery?

This is a quality certificate issued by the BIS guaranteeing the purity of gold in a certain piece of jewellery. This certificate will be issued to all registered jewellers based on purity tests at certificated centres.

Hallmarking is allowed on 14-, 18- and 22-carat gold jewellery. Gold in additional carats, 20, 23 and 24, will also be allowed for hallmarking in due course.

Since teething issues are involved, mandatory hallmarking has been implemented in India in a phased manner. Initially, it has been introduced in 256 districts which have assaying marking centres.

Under the hallmarking scheme of the BIS, jewellers need to be registered to sell hallmarked jewellery. BIS is the authorising authority for the testing and hallmarking centres. BIS (Hallmarking) Regulations were introduced effective June 14, 2018, but now it has been made mandatory. India is the only country with significant gold consumption that did not have mandatory hallmarking of gold.

What is the need for hallmarking?

Hallmarking will enable consumers/jewellery buyers to make authentic choices and save them from unnecessary confusion while buying gold. At present, only 30% of Indian gold jewellery is hallmarked. It brings trust to the buying process for the commodity that has seen high prices of around ₹50,000 per 10 gm.

According to the government, hallmarking of jewellery/artefacts is required to enhance the credibility of the wares on offer and the sale process as also customer satisfaction through third-party assurance for the marked purity/fineness of gold. Consumer protection is another key priority that will be served in the process. This step, the government said it believed, would help develop India as a leading gold market centre in the world.

Is it mandatory for all jewellers?

To provide time to jewellers and stockists who have been saddled with old non-hallmarked stock, the government has decided not to impose any penalties till August end, 2021 in the implementation of gold hallmarking. In November 2019, the government had said that hallmarking of gold jewellery would be made mandatory from January 15, 2021. The deadline was then extended to June 1 and then to June 15, 2021.

The mandatory hallmark certification of gold jewellery is good for both customers and businesses, said Piyush Goyal, Minister for Consumer Affairs, Food & Public Distribution, Railways and Commerce & Industry.

Who is exempted?

Jewellers with annual turnover up to ₹40 lakh have been exempted from mandatory hallmarking. Export and re-import of jewellery as per the Trade Policy of Government of India [Jewellery for international exhibitions, jewellery for government-approved B2B domestic exhibitions] have been exempted from mandatory hallmarking.

Watches, fountain pens and special types of jewellery [Kundan, Polki and Jadau] have been exempted. Jewellers can continue to buy back old gold jewellery without hallmark from consumers. Hallmarking for old jewellery can be obtained as per purity levels, if feasible, by the jeweller or after melting and making of new jewellery.

What if there are issues with regard to implementation?

A committee comprising representatives of stakeholders, revenue officials and legal experts will be formed to look into issues that may possibly emerge during the implementation of the scheme.

What is the infrastructure available?

In the last five years there has been a 25% increase in the number of assaying & hallmarking centres (A&H centres) in India. The number such centres have risen from 454 to 945. At present, 940 assaying and hallmarking centres are operative. Of this, 84 centres have been set up under the government subsidy scheme in various districts. These centres can hallmark 1,500 articles in a day and the estimated hallmarking capacity of these centres per year is 14 crore articles.

According to World Gold Council, India has about 4 lakh jewellers, of whom only 35,879 have been BIS-certified.

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