Small jewellers fret over new Hallmark ID number on gold ornaments even after winning a three-month reprieve

Gold hallmarking

As the Kerala High Court allows three more months for stamping the Hallmark Unique Identification (HUID) number on gold jewellery sold to the public, small-scale jewellers are still worried that they may lose some money in implementing the order.

The Ministry of Consumer Affairs made sale of gold jewellery with HUID mandatory from April 1, 2023. Although it was made compulsory around two years ago -- in July 2021 --gold merchants had sought time to get their stock of jewellery hallmarked with the new logo and number of the Bureau of Indian Standards (BIS).

They have to remove the old hallmark and stamp the new one. The old hallmark comprises the year of marking, assaying and hallmarking centre mark, jewellers’ identification mark, BIS logo and purity and fineness grade. The new hallmark retains BIS logo and purity and fineness grade and adds the six-digit HUID alpha numerical code.

Potential losses

Getting the entire set of jewellery of a retailer re-hallmarked is a time-consuming process. Despite allowing a couple of years for its implementation, many small jewellers, who account for over 90 percent of the total industry, are yet to get it done.

“The jewellers have to comply with it as it is unavoidable and beneficial from the point of view of the customer. We hope the government will consider the option of permitting to add HUID code by retaining the old hallmark to avoid losses for the small trader,’’ said K Surendran, general secretary of the All Kerala Gold and Silver Merchants Association, which had gone to court seeking more time for implementation of the new hallmark and to allow the sale of gold jewellery with the old hallmark until then.

The contention of small-scale jewellers is that they will lose 2 to 5 mg of gold per piece of jewellery while removing the old logo and stamping the new one. In addition, they have to bear the hallmarking charge of Rs 45 per item. With the gold price hovering around Rs 5,500 per gram, this could add a tidy sum considering that the hallmarking has to be done on every single piece of jewellery, be it a small ring or a heavier necklace.
Even as the small gold merchants recover from losses in the years of rampant spread of Covid-19, the runaway increase in gold prices in the last few months has upset their calculations.

For consumers, it ensures quality

A noticeable trend is that the customers have reduced the quantity of gold purchased from a trader. According to Surendran, recycling of gold has increased as many are selling their old ornaments to buy new ones.
The unique identification number also poses flexibility problems for the jeweler, who may not be able to customise a piece of jewellery.

“We have made a representation to the Commerce Ministry for simplifying the procedures. There will be some practical difficulties like, for instance, in a necklace, we cannot remove the chain or pendant and use it for another one as per a customer’s preference as the entire piece of jewellery will carry a single number,’’ said B Govindan, zonal chairman, south, of the All India Gem and Jewellery Domestic Cuncil.

On the whole, jewellers are happy about the new hallmarking, which they say ensures quality of gold used in the jewellery and helps in traceability as HUID is unique for each piece. It can be used to trace the manufacturer, assayer and the retailer who sold it.

“There were cases of duplicating of old hallmarks. This is not possible with HUID. The traceability will also benefit jewellery exports as it discourages manipulation. The new hallmark is a guarantee from the government about the quality of the jewellery,’’ said Ramesh Pai, partner of Geeripai Gold and Diamonds.

The new hallmarking could discourage sales without a bill – a ruse to avoid payment of tax. Many small jewellers allow customers to buy ornaments without a bill to compete with big jewellery chains who lure customers by offering heavy discounts or incentives

As the data of the total amount of jewellery hallmarked will be traceable, any discrepancy in the sale bill can be easily detected.
The government should enforce strict monitoring along with the implementation of new hallmarking, said M P Ahammed, chairman of Malabar Gold and Diamonds.

“The first hallmarking came into existence over two decades ago and the new one two years ago. But illegal trade by non-payment of taxes and duties still continues in the gold industry. This can only be controlled by strict monitoring through e-governance,’’ he said.