GJEPC brings key updates from BIS for the gold industry on mandatory hallmarking

The jewellery industry received a lot of information from the horse’s mouth today. A lot of misconceptions around mandatory hallmarking legislation were clarified at the virtual gazette notification by BIS. Organised by GJEPC, the meet was moderated by GJEPC chairman Colin Shah and participated by Pramod Tiwari, director-general, BIS, with K Srinivasan, convenor (gold panel) GJEPC, voicing the concerns of gold jewellery manufacturers.

The meet started with Shah reiterating the current status of gold jewellery manufacturing and export from India. “We are the 5th largest gold exporter and 82% of our gold jewellery export goes to the Gulf countries. India has 27% global gold jewellery consumption share and there are 4 lakh jewellers in the country,” stated Shah, asking the BIS head to give a brief insight into the government’s perception on hallmarking.

Subsidy scheme incoming, HUID not mandatory at retail level

Highlighting the pressing need for lower, lower-middle and upper-middle class families who only buy gold jewellery occasionally and often at the expense of significant property-related investments, Tiwari said efforts are on to implement hallmarking as painlessly as possible. “There is at least one hallmarking center in each of the 256 districts where hallmarking ismade mandatory. Execution is done as per discussions with the thehigh-level committee, so that small jewellers shouldn’t face issue while accessing such centres,” said Tiwari. He added that alternate strategies are considered as setting up centers in places like Lakshadweep and Andaman are not possible. He also hinted at announcement of a generous subsidy scheme for setting up assaying centers next week. “Subsidy to the tune of 70-75% will be given,” he said.

Clearing doubts regarding complexity of HUID, Tiwari said that hallmarking centers now have their workflows automated, which necessitates HUID that tracks jewellery movement from the manufacturer, wholesaler, to retail and consumer levels. “The 6-digit code will give complete record of a jewellery piece getting hallmarked duly. When we audit the assaying centers through surprise and periodically, the data through such codes will help. Floating the idea in retail was done to track jewellery movement for accurate spotting of hallmarking issues. Anomalies can be committed by the center, the manufacturer or the retailer. So the retailer need not fear. Considering issues faced at the retail level, we are limiting HUID to hallmarking centers only,” Tiwari maintained.

When asked what will be the legal recourse for a buyer after finding sub-standard purity in jewellery bought, Tiwari said that consumers can register complaints through the BIS app and consumer complaint management portal. “Once a buyer flags the issue, BIS officials will go to the brand, collect pieces and check purity at designated centers. If the complaint is found trueand there is a difference more than 40ppt (parts per thousand), a cancellation notice is given. Less than that, a jeweller is sent a notice to check the issue. This is done on spotting minor anomalies with the brand twice,” Tiwari said. Compensation will be given to the buyer equal to the value of twice the gap in purity found. Citing a small development in the gazette notification, he added that 20K, 23K, 24K jewellery will also be hallmarked.

Notes on Export order

Deliberating on stock building in anticipation of export, Tiwari said that clarity should persist in the value chain which must follow a standard SOP. Acknowledging that every business has a period of inventory build-up and that manufacturers need not worry about surprise check and penalisations all the time, he admitted that the law prohibits storage of non-hallmarked gold jewellery and there should be further discussions on the committee level for this.

Answering a question by Srinivasan on the onus of export, Tiwari said that a wholesaler with an export order must send a declaration stating that s/he needs the jewellery for export. He stated that re-import of rejected exported items will be relieved from hallmarking. “Any government approved B2B exhibition is exempted of hallmarking until its exhibits are not for sale,” Tiwari clarified.

Tiwari stated that registration is free now, which has hiked the number of jewellers under the ambit crossing 40,000 in days. However, registration is must if a jeweller with annual turnover below Rs40 lakh wishes to sell hallmarked jewellery. Agreeing that gold content in studded and other forms of jewellery must be hallmarked, with HUID for detachable items of same gold jewellery piece, Tiwari said that BIS is conducting training programs for all hallmarking centers and every center has the ability to grade white gold too. “Sampling procedure is already there. We’ll ensure that centers get to grade these varieties successfully,” he added.

The decision to hallmark jewellery pieces, the BIS chief maintained, rests among the wholesaler, manufacturer and retailer concerned. The one wishing to take responsibility can hallmark. Also, more than one party in this value chain can hallmark a product. In case of purity anomaly, notice will go to the hallmarking center, which claims total responsibility. “Those pieces already hallmarked can be sold as is. The registered retailer must furnish a declaration stating the quantity of hallmarked jewellerys’he has before mandatory legislation,” Tiwari maintained.

Citing the quality control order, Srinivasan said that a weight variation of 2 grams can be accepted even if that changes the weight of the jewellery. “The overarching measures by the legislation will give value for money to end consumers,” Srinivasan remarked.

What about old and antique jewellery pieces?

Jewellers need to re-hallmark old hallmarked jewellery. As a business practice, 10-20% of a retailer’s inventory are back in system and re-melted to make new jewellery. Old jewellery with HUID will be disabled and the jeweller will get the option to do that. Tiwari maintained that the advisory committee will discuss on how to hallmark heritage jewellery. “When jewellery is encoded, we get the data. We can track through that code with our dashboard easily” he maintained.

Raising the pertinent issue of HUID and its feasibility for each gold jewellery piece made now, Shah asked Tiwari if the modules of HUID are glitch-free, considering thousands of jewellery pieces by a single retail brand will need to be encoded.On that note, Tiwari assured that many modern hallmarking centers have equipment where SRF numbers are automatically generated. “Entries must be computerised. We are giving hands-on training to assaying centres. Manual entry will be replaced by seamless computerised entry. Many jewellers have already started hallmarking in this way,” Tiwari added.

Penalisation measures

Urging the industry to take the claim of no penalty till August 2021 in spirit, Tiwari said that complaints before that will be duly inspected by the BIS.The penal provisions of imprisonment of 1 year and fine upto 5 times the value of purity difference was reiterated.The BIS chief maintained that implementation of penalization will be done through court of law. “The law states to penalise only those players with criminal intentions. Any minor anomaly will be responded to with advisory notices as mentioned,” concluded Tiwari.

The meet ended on a positive note and a far tempered attitude of the BIS towards the Indian jewellery industry. However, as Srinivasan pointed out, 76 questions from manufacturers remained unanswered and that total clarity in the issue will depend upon the time and energy the government and jewellery associations keep investing on this subject. Retail Jeweller is extensively covering the developments on mandatory hallmarking legislation. Keep an eye on this space for more updates.

Written by Shubham Dasgupta

RJ exclusive