Gold hallmarking to be made mandatory

Gold purchasing will soon be more comfortable experience without the nagging doubt about its purity, as the government is set to make it mandatory from January 2008 to emboss all gold sold in the country with Bureau of Indian Standards (BIS) hallmarking.

Hallmarking is the accurate determination and official recording of the proportionate content of gold in the precious metal. Hallmarks are thus official marks used in many countries as a guarantee of purity or fineness of gold jewellery.

In the first phase the yellow metal sold in four metro-Delhi Mumbai Kolkata and Chennai would compulsorily have hallmarking, assuring the purity, while the rest of the country would have to implement the norms in the next few months.

"We are going to make hallmarking mandatory in four metros from January 1, 2008," a top official in Department of Consumer Affairs told PTI.

India consumes on an average 800 tonnes of gold each year. Given that the per cent of impurity in the yellow metal is 11-39 per cent, it translates to short charging from the customer to the tune of Rs 7,500 crore (Rs 75 billion), he added.

Taking cognisance of these aspects the RBI Standing Committee on Gold and Precious Metals opined that introduction of a hallmarking system would not only protect the public from fraud, but also assist exports of jewellery.

However, it also acknowledged that compulsory certification of gold would not be executable thoroughly because of the massive structure of the trade in the country, both in the organised and unorganised sectors.

Recommending the pursuance of a voluntary scheme, the committee said any deviations in purity should invoke penalties under legislation. It also said BIS should be the sole agency in the country for hallmarking of gold jewellery under the provisions of the BIS Act, 1986.

"Till date, the hallmarking was voluntary, but compliance was not yielding necessary results, hence it would be now mandatory and we are in process of formulating penalties and other actions against those who do not comply with it so that consumers do not suffer," a senior BIS official in charge of hallmarking said.

She, however, refused to divulge any more details about the penalties being contemplated by BIS.

Commenting on the commitment of MMTC to offer gold jewellery with hallmarking, MMTC chairman and managing director Sanjiv Batra told PTI: "We aim at protecting consumer rights and heavy demand for standardisation of gold and to provide the best to consumers in terms of designs, craftsmanship and the fullest assurance of quality."

Apart from jewellery, a host of other facilities are extended to customers including mandatory hallmarking and purchase guidance at our exhibitions," he added.

Echoing the same sentiments leading jewellers Tanishq and Mehrasons said the move would set benchmark for the industry.

Ajay Mehra, Director Mehrasons Jewellers told PTI, "It is the step in right direction. We had not waited for the government directive but have proactively done it when it was made voluntary.

Spokesperson for Tanishq, the jewellery division of Titan Industries Ltd said, It is a welcome initiative and it will herald standardisation across the industry, thereby protecting the interest of the consumers.