Say move will increase financial burden, ask how rural counterparts are expected to follow rule
A customer looks at gold ornaments at a jewellery store in Dadar on April 22. Pic/Ashish Raje
With an aim to bring in transparency, keep track of the gold entering the country and ensure that consumers are not duped by jewellers, the government of India has mandated that every gold ornament should have a six-digit Hallmark Unique Identification (HUID) and set March 30 as the deadline for this.
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The deadline has been extended to June 30, only for jewellers who have already disclosed their old stocks in hand. But smaller jewellers in the city are of the view that HUID will only increase the burden on them and stated that those operating from remote villages, where hallmarking is not done, would be worse hit.
Those who violate the HUID mandate will be imposed a penalty five times the price of the jewellery or sentenced to one-year imprisonment or both under the Bureau of Indian Standards (BIS) Act. However, this won’t have a major impact on small traders, as the new norms exempt those traders whose yearly turnover is less than R40 lakh from compulsory HUID, said an expert solicitor who deals with bullion traders.
Why HUID and not hallmark?
A proprietor of a jewellery outlet in the suburbs, who requested anonymity and has been selling only hallmark jewellery for the past twenty years, said, “As per the government notification, all my old stocks which were hallmarked, had to be embossed again with the new six-digit HUID. To my surprise, not a single hallmarked ornament was found to either be inferior in quality or below the purity standards. Then why the new HUID? Is it that the government was not trusting its own hallmarking system that it had mandated earlier? This has only added to the financial burden of jewellers, who earlier paid for hallmarking and now for removing the hallmark and getting the HUID embossed.”
‘Reduce Import duty instead’
The jeweller added, “We hear from the bullion market that the government want to curb black marketing of gold. About 800 tonnes of gold come to India yearly, of which only 600 are getting accounted for. The government is keen to stop this and hence the HUID has been introduced. Instead, the government should reduce the huge import duty of 15 per cent levied on imported gold. By default, gold smuggling will come down, at a time when prices of gold have touched 60,000 per gram.”
Bharat Jain, a proprietor of a jewellery outlet; Stuti Galiya, solicitor; Saiyam Mehra, chairman, All India Gem & Jewellery Domestic Council
Food adulteration v/s gold
The jeweller stated, “The bitter truth is the government can not stop the adulteration of basic food items, including milk, which is a day-to-day need, but is aiming to curb adulteration of gold, which is a market only for those who can afford it, not for the masses, who can’t afford two square meals per day. Also, villages and large parts of the country do not have hallmarking facilities. Have they thought of the small jewellers in these pockets, who will be completely wiped off?”
Also read: Mumbai Police issues prohibitory orders for city till May 10, check details
No option
Bharat Jain, a proprietor of a jewellery outlet in Ghatkopar West, has been in the business since 1975. He said, “I have no option but to abide by the government rules and had to incur an additional expense of approximately R53,000 for 10,000 pieces of hallmarked jewellery. But only large chain and corporates outlets can manage these things easily, as they have a large workforce, and work gets distributed, which is not the case with smaller ones, which are mostly proprietary outlets, where the owner has to multitask and needs to take the risk of carrying his stock to the HUID centres and even get them back after a day. This means his shop will be closed for two days. In Mumbai, we can find hallmarking/HUID centres within three to five km, but this is not the case outside the city limits or in rural areas. The only way to curb the menace is by not targeting small traders, but by also looking beyond, within the bullion industry.”
Expert speak
Solicitor Stuti Galiya, a partner with the law firm Khaitan & Company, said, “Consumers should download the BIS Care App on their Android phone before buying a gold item. Before purchase, they should inspect the article for a laser-inscribed HUID. They should then enter the six-digit HUID on the app to verify the authenticity of the item.”
“The mandatory hallmarking rule is applicable only for the purchase of new jewellery. If a consumer has old gold items hallmarked with the old signs in their possession, it will be considered hallmarked jewellery. There is no need to get the already-hallmarked jewellery re-hallmarked with the recently introduced 6-digit alphanumeric code. However, where a consumer has in their possession un-hallmarked gold items, there are two options—get the old jewellery hallmarked through a BIS-registered jeweller or get the jewellery tested from any BIS-recognised Assaying & Hallmarking Centre, by paying nominal fees. This will provide the item authenticity regarding purity in case the consumer decides to sell the item,” said Galiya.
“Also jewellers with an annual turnover of less than R40 lakh are exempted from HUID hallmarking,” she concluded.
June 30
Deadline for adhering to new rule
Teen Sawal
mid-day reached out to Saiyam Mehra, chairman, All India Gem & Jewellery Domestic Council, which has 3,000-plus members, and took his view on the three areas of concern.
On deadline extension
“The extension is a major relief for jewellers who hold old jewellery stock. The industry will try to emboss the HUID number on all items till June 30. In rural India, jewellers will have to travel long distances to carry out hallmarking. Hence, there could be delays,” said Mehra.
On burden of shift
“Jewellers will have to bear the cost of hallmarking jewellery which will be passed on to the consumers at the time of purchase. Intermediaries are just service providers and hence, any additional cost of jewellery marking would be borne by consumers. Mandatory hallmarking will create confidence among consumers,” he said.
On gold price rise
“Gold prices have reached an all-time high in rupee value following global markets as the economic uncertainty and the ongoing geopolitical tensions, coupled with rising inflation and stagnating real-estate and financial markets, claim gold as the best investment avenue. The gold price has offered nearly 20 cent returns in the last year and is set to offer at least 10 per cent additional profit in the next year. While the ongoing seasonal pick-up is a bit slow, consumers’ sentiment continued to remain bullish towards gold.”
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