Govt makes it mandatory to hallmark gold jewellery from Jan 1; Industry fears ‘GST-type’ slowdown

The Narendra Modi government has made it madatory to BIS hallmark all gold and silver jewellery from January 1, 2020. The government plans to implement gold hallmarking across the country in four phases, starting with the metro cities. Officials from the Ministry of Consumer Affairs said that this will help to ensure that people don’t get cheated while buying gold ornaments, The Print reports.

The central government’s decision comes days ahead of the World Trade Organization’s (WTO) 8 December deadline for India to comply with the gold benchmark and issue a quality control order. Failure to comply could result in restrictions on Indian gold products by other WTO signatory countries.

According to the Bureau of Indian Standards (BIS) Act, 2016, jewellers are required to mark gold under three measurements — 14 carat, 18 carat and 22 carat. A carat is a measurement indicating the proportion of gold in an alloy out of 24 parts. So, a 22-karat gold is 22/24 parts gold.

The government plans to implement gold hallmarking across the country in four phases, starting with the metro cities. According to a senior official at the consumer affairs ministry, jewellers are likely to be given a year’s time to hallmark their gold products, according to the standards set by the Modi government.

In addition to about 800 hallmarking centres, the government is also planning to open 861 hallmarking centres across the country to help more jewellers register themselves for the BIS hallmarking licence. At present, there are only 28,000 jewellers across the country who have registered with the BIS, the official further said.

Short-term disruption, say jeweller associations

Jeweller associations, in the meanwhile, have raised concerns about the move, saying it might lead to short-term disruptions in businesses.

Santosh Salunkhe, chairman of the vigilance committee of the Indian Association of Hallmarking Centres, told ThePrint, “This move might hurt gold sales in India, which is already witnessing a slowdown, as demonetisation and GST did.”

Salunkhe, however, also admitted that the move will help industries and consumers in the long run. “Lack of awareness among jewellers and consumers is a major hurdle since there is no demand for hallmarked jewellery.”

As reported by ThePrint earlier, according to the World Gold Council, consumption in India is forecast to drop to 700 to 750 tonne range this year, the lowest since 2016, compared to an earlier estimate of 850 tonne. Also, the percentage of Indians who bought gold had gone down by 32 per cent to 123.9 ton in the July-September period.

Move likely to boost gold export

According to the Gem & Jewellery Export Promotion Council (GJEPC) set up by the Ministry of Commerce and Industry, India’s export of gold jewellery was worth $6,161 million for the April-September 2018 period. This has declined by 0.67 per cent to $6,119 million for the same period this year.

Uday Shinde, president of the Indian Association of Hallmarking Centres, told ThePrint, “The government’s move will boost the credential and business of our gold products in the foreign market. Indian gold export market has remained stagnant after the 2011 and 2012 boom when the business was of worth $1,0029 million and $1,3267 million, respectively.”

“The three new specific carat of hallmarking will also reduce confusion in the domestic market as a 22-carat gold product in south India is often referred to as pure gold in Maharashtra. This leads to doubts over product quality and decrease in consumption,” added Shinde.

(For all the latest News, Mumbai, Entertainment, Cricket, Business and Featured News updates, visit Free Press Journal. Also, follow us on Twitter and Instagram and do like our Facebook page for continuous updates on the go)

Free Press Journal

www.freepressjournal.in