In November 2019, the government had announced mandatory hallmarking of gold jewellery and artefacts from January 15, 2021. This was later extended till June 1, 2021, as jewellers had sought time to shift to hallmarking and register themselves with the BIS amid the pandemic.
MSMEs and startups in the jewellery sector heaved a temporary sigh of relief following a court’s order directing the Bureau of Indian Standards (BIS) to avoid taking any coercive action on jewellers till June 14, 2021, who are not able to comply with mandatory hallmarking regulation by June 1, 2021. The Nagpur Bench of Bombay High Court has passed an interim order stopping BIS from imposing a penalty on those who may not comply with BIA (BIS Act, 2016) regulations [Section 29(2)] on mandatory hallmarking due to the lack of adequate infrastructure in terms of assaying and hallmarking centres.
“The contention is that the new regulation making it compulsory to hallmark gold jewellery before it is stored or sold, which has to come into force w.e.f. 1st June 2021, is likely to result in great hardships to lakhs of jewellers in India, and their number is stated to be 5 lakhs,” All India Gem and Jewellery Domestic Council (GIC) cited the court ruling. The government had last month said that it is prepared to implement mandatory hallmarking of gold jewellery and artefacts from June 1, 2021. According to CIG, the court accepted its plea that hallmarking of around 6,000 crore pieces of jewellery, which are not hallmarked, cannot be done “at short notice.”
Hallmarking is a purity certification of precious metals and has been voluntary in nature so far. In November 2019, the government had announced mandatory hallmarking of gold jewellery and artefacts from January 15, 2021. This was later extended till June 1, 2021, as jewellers had sought time to shift to hallmarking and register themselves with the BIS amid the pandemic. The writ petition for reprieving jewellers was filed by GIC.
“There are also other problems arising out of the present Covid restrictions, which prevent a person to travel from one district to another district and that there are several districts, which do not have any hallmarking centres yet. And the court has in the meanwhile, directed that no coercive action shall be taken against the jewellers under Section 29(2) of the BIS Act, 2016, till next date of hearing on 14th June 2021,” said Saiyam Mehra, Vice Chairman, GJC.
Hallmarking Charges for gold jewellery/artefacts and silver jewellery/artefacts are Rs 35 per article and Rs 25 per article respectively, as per BIS. Financial Express had reported on April 14, 2021, that 34,647 jewellers had registered with BIS so far and mandatory hallmarking will allow jewellers to sell hallmark certified 14-, 18- or 22-carat gold jewellery. However, there are several MSMEs that have been looking for this compliance to come into effect to ensure standardisation of the quality of Indian jewellery is at par with global standards.
“The deadline can be further extended for a year or so to provide jewellers with an apt time to comply with the hallmarking rule. Delhi, Gujarat, Kolkata, Mumbai, and Tamil Nadu are the major hubs of jewellery manufacturing. They have the right infrastructure and businesses that can afford hallmarking charges. Once it is made mandatory then only jewellers will start adhering to it. If there has to be an international standard in quality of Indian jewellery, then one would have to be strict in compliance,” Deepak Seth, Partner at Mumbai-based SK Seth Jewellers told Financial Express Online.
Citing court order, GIC Chairman Ashish Pethe said that the percentage of hallmarking centres available in India is just about 34 per cent of the 733 districts in the country and that there are at least 488 districts in the country, which do not have any hallmarking centres. It was further submitted that there are about 6,000 crore pieces of jewellery, which still need to be hallmarked. “While this will help to an extent but the real burden is that dealers have to be held responsible for any mistake in hallmarking by the hallmarking centres. Why should we be responsible for this? The authenticity has to be established by the one carrying out the hallmarking process,” Ashok Phophalia, owner of Delhi-based AL Jewellers told Financial Express Online.