Hallmarking in India "EMPOWER IAS"

Context: 

• The government recently announced the phased implementation of mandatory hallmarking of gold jewellery with effect from June 16 2021.

 

Background:

• The government had announced mandatory hallmarking of gold several years back. 
• However, it could not implement the same and kept postponing the dates.
• In November 2019, the government had announced the mandatory hallmarking of gold jewellery and artefacts across the country from January 15, 2021.
• However, later it extended the date of implementation to June 1, 2021, granting more time to jewellers to register themselves with the BIS in the wake of the Covid-19 outbreak.
• In May 2021, the government extended the deadline by a fortnight again.

 

About Hallmarking:

• The Bureau of Indian Standard (BIS), which operates gold and silver hallmarking scheme in India, defines hallmarking as:
• The accurate determination and official recording of the proportionate content of precious metal in precious metal articles
• It is a “guarantee of purity or fineness” of precious metal articles.
• It is required to enhance the credibility of gold Jewellery and Customer satisfaction through third party assurance for the marked purity/fineness of gold, consumer protection. 

 

Key Features of Gold Hallmarking:

• Firstly, Hallmarked gold jewellery will only available in three grades – 14-carat, 18-carat and 22-carat. Currently, it is available in ten grades.
• Secondly, The Hallmarked Gold jewellery will contain four marks. Such as BIS mark, purity in carat, assay centre’s name and jewellers’ identification mark.
• Thirdly, Applicability: The rule is applicable only to sales by retailers and not to consumers. However, it is available for consumers if they want to get their old jewellery hallmarked.
• Fourthly, Penalty: Anybody found violating the provision, will have to pay a minimum fine of Rs 1 lakh or 5 times the price of the article.

 

Benefits of Gold Hallmarking:

• Firstly, Gold Hallmarking will protect the public against lower caratage. It also ensures consumers do not get cheated while buying gold ornaments.
• Further, it will also help to get the purity, bring in transparency and assure the consumers of quality.
• Lastly, the new system will also weed out anomalies and corruption in the system of manufacturing of jewellery.

 

Metals covered under Hallmarking in India:

• The government, through a notification issued on June 14, 2018, notified two categories under the purview of hallmarking i.e.,
• The gold jewellery and gold artefacts and 
• The silver jewellery and silver artefacts
• So, hallmarking in India is available for the jewellery of only two metals i.e., gold and silver.
• However, a certain category of jewellery and items will be exempted from the mandatory requirement of hallmarking.
• According to the Department of Consumer Affairs, 
  •  
• Export and re-import of jewellery as per Trade Policy of Government of India, Jewellery for international exhibitions, jewellery for government-approved B2B domestic exhibitions will be exempted from mandatory Hallmarking.
• The watches, fountain pens and special types of jewellery such as Kundan, Polki and Jadau will be exempted from hallmarking.

 

Significance of this move:

• The hallmarking of jewellery/artefacts is required to enhance the credibility of gold jewellery and customer satisfaction through third party assurance for the marked purity/fineness of gold.
• This step will help to develop India as a leading gold market center in the world.
• The mandatory hallmarking will protect the public against lower caratage and ensure consumers do not get cheated while buying gold ornaments and get the purity as marked on the ornaments.

 

 

About Bureau of Indian Standards:

• BIS is the National Standard Body of India established under the BIS Act 2016 for the harmonious development of the activities of standardization, marking and quality certification of goods and for matters connected therewith or incidental thereto.
• BIS has been providing traceable and tangible benefits to the national economy in a number of ways –

1. providing safe reliable quality goods;
2. minimizing health hazards to consumers;
3. promoting exports and imports substitute;
4. control over proliferation of varieties etc. through standardization, certification and testing.

 

The purity standards for gold and silver under the hallmarking scheme:

• As per BIS standards, there are three categories of hallmarking based on the purity of gold i.e.,
  • 22 carat, 
  • 18 carat and 
  • 14 carat.
• However, the ministry recently announced that the gold of additional carats 20, 23 and 24 will also be allowed for Hallmarking soon.
• The jewellers can continue to buy back old gold jewellery without a hallmark from consumers.

 

The need of making hallmarking mandatory:

• India is the biggest consumer of gold.
• However, the level of hallmarked jewellery is very low in the country.
• This step will also help to develop India as a leading gold market centre in the World.
• According to the ministry, at present, only 30% of Indian gold jewellery is hallmarked.
• One of the reasons responsible for the low level of hallmarked jewellery is the non-availability of sufficient assaying and hallmarking centres (A&HC).
• It is to be noted that there has been a 25% increase in Assaying & hallmarking (A&H) centres in the last five years.
• There are about only 35,879 jewellers across the country, who are certified by BIS. The number of A&HC is 945.
• According to the ministry, one A&H centre can hallmark 1500 articles in a day and the estimated hallmarking capacity of A&H centres per year is 14 crore articles.