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EXPLAINED: What Is Gold Hallmarking, Why Has It Been Made Compulsory In India And How It Affects You

Representational photo.

Representational photo.

All you need to know about the new rules for the sale of the yellow metal in India.

Jewellers in India from now on can only sell gold of 14, 18 and 22 carats and gold items have to be compulsorily hallmarked after new rules to that effect kicked in on June 16, initially covering 256 selected districts. But what is hallmarking and how does it affect the consumers, and the sellers of gold?

What Is Hallmarking?

According to the Bureau of Indian Standards (BIS), whose Director General Pramod Tewari will lead a committee for ensuring the implementation of the new rule, “hallmarking is the accurate determination and official recording of the proportionate content of precious metal in precious metal articles”.

A hallmark is thus an officially recognised stamp of authenticity that establishes the “purity or fineness of precious metal articles”. The key idea behind hallmarking is to protect the public against adulteration of gold by requiring that manufacturers adhere to set standards.

According to the World Gold Council, dating back to the era of King Louis IX of France and Edward I of England in the 1200s, “hallmarking gold jewellery was Europe’s earliest form of consumer protection”. The term ‘hallmark’ itself arose from the Goldsmiths’ Hall, which was the headquarters of the ‘Worshipful Company of Goldsmiths’ in London, and the marks they used to add to gold jewellery after receiving a charter from King Edward III of England in 1327.

Who Authorises Hallmarking In India?

The government had announced in November 2019 that gold hallmarking would be compulsory from January 15, 2021. But that deadline was extended twice, first to June 1, and, then, June 16 amid the pandemic.

BIS says that its ‘Hallmarking Scheme’ incorporates international criteria for certifying gold. Under the BIS scheme, registration is granted to jewellers for selling hallmarked jewellery and “BIS certified jewellers can get their jewellery hallmarked from any of the BIS recognised Assaying and Hallmarking Centres”. The BIS (Hallmarking) Regulations were implemented on June 14, 2018.

According to a press release by the Union Ministry of Consumer Affairs, “hallmark will include a six-digit code along with BIS Mark & Purity and delivery voucher to be issued to jeweller”.

Is Hallmarking Now Mandatory For All Gold Items?

No. The Centre has said that jewellers who have an annual turnover of up to Rs 40 lakh will be exempted from mandatory hallmarking as will be the jewellery headed for international exhibitions or for government-approved B2B domestic exhibitions. Further, watches, fountain pens and special types of jewellery, like Kundan, Polki and Jadau will be exempted.

As to old ornaments and gold items that do not bear the hallmark stamp, the Centre said that jewellers “can continue to buy back old gold jewellery without hallmark from consumer”. At the same time, the Centre has said that “old jewellery can be got hallmarked as it is, if feasible by the jeweller or after melting and making new jewellery”.

BIS also said that hallmarking will be done at the first point of sale, “which may be manufacturer, whole-seller, distributor or retailer”. Gold of additional carats, that is, of 20, 23 and 24 carats will also be allowed for hallmarking.

In January 2020, when the Centre had announced the early 2021 deadline for bringing in the hallmarking scheme, officials were reported as having said that the penalty for selling non-hallmarked gold would range from Rs 1 lakh to five times of the value of the item and also imprisonment for one year. However, launching the scheme from June 16, the Centre said there “would be no penalties till August-end” to give adequate time to the manufacturers, wholesalers and retailers of gold jewellery to adapt to the new rule.

What Are The Districts Where The Rule Is Initially Operational?

A total of 28 states and Union Territories account for the 256 districts where the hallmarking scheme has been first rolled out, per the list shared by the Centre.

According to the government, at present, only 30% of Indian gold jewellery is hallmarked. But the number of assay and hallmarking (A&H) centres has increased from 454 to 945 in the last five years and 940 of those are currently operational. The Centre said that an A&H centre can hallmark 1,500 articles in a day and that the country’s total hallmarking capacity is for 14 crore articles a year. According to the World Gold Council, India has around 4 lakh jewellers, of which only 35,879 are BIS certified.

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