Hallmark on gold jewellery mandatory but checking cheating by sellers to remain a challenge

Hallmarking of gold jewellery has finally become mandatory , even if only in 256 of the 718 districts in the country

Hallmarking of gold jewellery has finally become mandatory , even if only in 256 of the 718 districts in the country. .

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The journey from voluntary to mandatory hallmarking has taken the Bureau of Indian Standards (BIS) and the union ministry of consumer affairs, 21 long years and today the enforcement of the mandatory order puts to test the capabilities and the tenacity of the national standards body.

In a country where roughly about 88% of the jewellers misrepresent the purity of gold sold by them, mandatory hallmarking was an absolute necessity. But inculcating honesty in all those disreputable jewellers who have thrived on unethical practices all these years, is not going to be an easy task.

In fact in the last several years, as consumer demand for hallmarked jewellery slowly picked up, many dishonest jewellers have been found to use fake BIS marks to fool consumers. Press releases issued by the BIS following raids on such jewellers bear testimony to this.

In one such case that came up before the Madhya Pradesh High Court , the jeweller was forced to forfeit all pieces of jewellery with fake hallmarking and also pay a fine of ₹45,000.(BIS, Bhopal Vs D.P.Jewellers, April 5, 2019)

That case was decided under the old BIS Act. Today, under the new BIS Act of 2016, such offences invite stiff financial penalties and even jail term of one to two years and it is extremely important to mete out the toughest penalty provided under the Act and instil the fear of the law in these jewellers. Now mandatory hallmarking brings the added responsibility on the BIS to not only nab those who fail to comply with compulsory hallmarking or use spurious markings, but also those assaying and hallmarking centres that indulge in corrupt and dishonest practices. In February this year, BIS officials raided a fake hallmarking centre in Jammu, but there have also been instances of BIS recognized assaying centres issuing the hallmark of purity without even testing the gold.

After a study initiated by the consumer affairs ministry threw light on some of these malpractices, the BIS introduced several new measures, including a software for real time monitoring of the activities of the centres, so as to prevent fake and fraudulent markings. All in all it’s a tough call to ensure the integrity of the entire hallmarking system, but consumer protection demands that the BIS accomplish this. Besides, on the success of the first phase rests the mandatory scheme in the remaining districts.

It was in the summer of 2000 that the BIS first brought gold jewellery under hallmarking under a voluntary scheme. As can be expected, the response from the jewellers was lukewarm. By November that year only 149 jewellers had taken the license from the BIS . Even these had only a few pieces of hallmarked jewellery because of lack of consumer demand . A market survey of non-hallmarked jewellery undertaken a year later by the BIS along with consumer activists in eight cities, showed that a whopping 88 per cent of jewellers cheated on caratage. This raised the demand for mandatory hallmarking

However, an expert committee constituted by the ministry in 2003 , said while mandatory hallmarking was necessary to protect consumer interest, it can only be done after building the required infrastructure, , the most important being assaying and hallmarking centres- covering all the districts in the country. The ministry has since been making efforts , including through several incentives, to increase the number of testing centres.

Thus from 12 hallmarking centres in February 2002, today their numbers have swelled to 943. Yet, a large number of districts and even some of the states do not have even one assaying centre. This has forced the government to introduce mandatory hallmarking in a phased manner, covering only 256 districts that have hallmarking centres.

From just 265 in 2002, today 39,000 jewellers have taken the license from BIS for getting their jewellery hallmarked through BIS recognized assaying and hallmarking centres. Rough estimates put the total number of jewellers in the country at about two to four lakhs.

At present, government has exempted from the mandatory scheme, jewellers whose annual turnover is less than ₹40 lakh. However, such small outlets cater mostly to the poor and the rural consumers and it is imperative that these too be brought under mandatory hallmarking at the earliest.