Gold standard

Any regulation that brings about a big change in the manner in which trade has been carried out over decades, is bound to be met with resistance — as in the case of jewellers who are protesting against the Bureau of Indian Standards’ order mandating hallmarking of all gold and silver articles from June. But the hallmarking rules are a step in the right direction to improve transparency and consumer protection, check tax evasion and lift the credibility of the industry. Hallmarking determines the accurate proportion of precious metals in jewellery, artefacts or bullion and the new rules lay down that the hallmarking needs to be done at the Assaying and Hallmarking Centres (AHC) recognised by the BIS. The Hallmarking Unique ID (HUID) needs to be recorded at the government portal before sale. With the unique ID capturing the manufacturer as well as the AHC, along with the proportion of precious metals in the manufactured product, it would provide tax authorities with a trail to check tax evasion. While hallmarking of jewels was voluntary prior to June, many jewellers were already using this process to improve the credibility of their products.

The arguments put forward by the jewellers opposed to this move do not appear substantive enough. They cite increased compliance burden due to the need to get hallmarking done at the BIS registered AHCs, lack of computer skills among smaller jewellers and the delay in selling the manufactured product due to time taken at the assaying centre, as reasons for reconsidering the order. These are but teething troubles that are seen with most new regulations and the long-term benefits from the change generally tend to negate short-term discomfort. The Centre has anyway given exemptions to jewellery makers with annual turnover less than ₹40 lakh, and to gold jewellery weighing less than two grams in order to reduce the burden on small businesses. With gold purchases accounting for a large portion of household savings in India, and gold being an asset that is monetised or leveraged during period of financial stress, it is important that the customers are not cheated in any way, and hallmarking is a good way to ensure that.

That said, the Centre needs to consider the complaints of the jewellers with respect to lack of access to assaying infrastructure. While the Centre says that assaying infrastructure is adequate and around three lakh pieces of jewellery get HUID every day from the 933 AHCs across the country, there are many jewellers who do not have BIS-recognised assaying centres in the vicinity and hence have to face delays and higher logistics expenses to get the HUID. The Centre needs to expedite the setting up of more AHCs and expand the existing centres further so that jewellers do not face undue delays. While smaller jewellers have been exempted from these rules now, they should also be nudged towards hallmarking their products eventually, so that the gold and jewellery business becomes totally transparent, credible and trustworthy.