Explained: What is hallmarking of gold jewellery, and why has it been made mandatory from today

The Central Government on Wednesday announced that no penalty will be imposed till August on jewellers and artisans who do not comply with the mandatory hallmarking of gold jewellery and artefacts as per the new rules that came into effect from Wednesday. Why is this relevant? The new order has come as a relief to jewellers who have been unable to comply with the mandatory hallmarking of gold jewellery and artefacts that came into force in 256 districts.

However, there is a caveat to the relaxation.  

Even though the government won’t initiate any action on its own, it doesn’t mean consumer complaints with regards to the purity of gold jewellery or artefact will be ignored. According to PTI, the Centre clarified that action will be taken on complaints as per the law. Consumers can raise complaints on the BISCARE APP or consumer engagement portal of the Union consumer affairs ministry. What is hallmarking? Hallmarking is a purity certification of gold issued by the Bureau of Indian Standards guaranteeing their purity. The certificate is issued for gold jewellery and items as per purity tests conducted by BIS recognised assaying and hallmarking centres. The certificates are issued to all jewellers registered with the BIS. For the longest time, gold hallmarking in the country was voluntary. But, in 2019, the government announced it would make it mandatory from 15 January, 2021. However, after the jewellers sought more time in view of the COVID-19 pandemic situation in the country, the deadline was extended twice till 15 June. Curerntly, hallmarking is allowed on gold jewellery of purity 14 carats, 18 carats and 22 carats. BIS is planning to issue mandatory hallmarking for gold with a purity of 20 carats, 23 carts and 24 carats in a phased manner as well. Where do the new hallmarking rules apply? Initially, the Central Government was planning to implement the mandatory hallmarking of gold jewellery and related items in the entire country. However, the decision was modified following an overnight meeting with stakeholders. The Centre has now decided to roll out the hallmarking scheme in a phased manner and also relaxed this norm for certain players in the industry. Out of 715-odd districts in the country, mandatory hallmarking of gold jewellery and artefacts has come into force in 256 districts across the country for 14, 18 and 22 carats of gold jewellery/artefacts only from Wednesday. The rest of the districts will be included in two phases. In the second phase, another 240 districts may be mapped that are in the 100 km radius of the first phase districts after the infrastructure is in place. Who has been exempted from mandatory hallmarking? The government has exempted the difficult areas, which do not have a hallmarking and assaying centre near them, from the scheme as of now. These include six northeastern states, as well as Union territories like Jammu and Kashmir, Ladakh and Andaman and Nicobar. The government has also relaxed mandatory gold hallmarking guidelines for jewellers with an annual turnover of up to Rs 40 lakh per annum so that small jewellers do not face problem in accessing assaying centres. Besides small jewellers, the government has also exempted those who export and re-import jewellery as per the government’s trade policy, jewellery meant for international exhibitions as well as for government-approved B2B domestic exhibitions. Manufacturer, importer, wholesaler, distributor or retailer engaged in selling precious metal articles have to mandatorily get registered with BIS for hallmarking. However, artisans or manufacturers who are just making the gold jewellery on a job work basis for the jewellers and are not directly related to the sale to anyone in the chain are exempted from registration. Why has hallmarking been mandatory from 16 June? The mandatory hallmarking protects the public against lower caratage and ensures consumers do not get cheated while buying gold ornaments and get the purity as marked on the ornaments. The BIS has been running a hallmarking scheme for gold jewellery since April 2000. Around 40 percent of gold jewellery is being hallmarked currently. The government said there has been a 25 percent increase in assaying and hallmarking centres to 945 from 454 in the last five years. According to Pramod Kumar Tiwari, director-general, BIS, the mandatory hallmarking of gold is a massive change taken to protect the interest of consumers. Hallmarking should be done at the first point of sale which may be manufacturer, wholesaler, distributor or retailer, he added. Why has the government relaxed penalties on non-complying jewellers? Tiwari told PTI that the government has decided not to impose a penalty on jewellers failing to comply with the mandatory gold hallmarking norms to ensure jewellers adapt to the new system. “This is a massive change that is happening in the ecosystem of the industry. There are lakhs of jewellers, including small jewellers, who have to register themselves and get accustomed to the new system. It takes time,” Tiwari said. He also said that the government will concentrate on handholding jewellers, helping customers and manufacturers to adapt to the new system. Tiwari informs that jewellers had an apprehension that they would be punished if they were found to have committed “small mistakes like sending jewellery to assaying centres or delay in registering themselves for hallmarking”. “We have tried to allay these apprehensions. We have told jewellers not to be scared of the new system. Make best efforts to adopt,” he said. To persuade jewellers to opt for hallmark registration, the government has exempted the one-time registration fee from jewellers. Besides, the government is also allowing alteration in the hallmarked jewellery up to two grams of increase or decrease with the responsibility of purity on the jeweller, added Tiwari. With inputs from PTI