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Mandatory hallmarking in the current format infringes consumers’ right: Jewellers to govt

Mandatory hallmarking in the current format infringes consumers’ right: Jewellers to govt. Mandatory hallmarking of gold jewellery in the current format doesn’t give consumers the freedom of right to choose and restricts their choice/jewellery trade that has a 5,000-year-old legacy in India, All India Gem & Jewellery Domestic Council (GJC) said in a letter to the government.

Addressed to the Department of Consumer Affairs under the Union Ministry of Consumer Affairs, Food & Public Distribution, the letter from the national apex body of the gems and jewellery industry reads that the mandatory hallmarking is supposed to become enformed by June 2021.

The Bureau of Indian Standards (BIS) which approves the standards for purity and fineness of gold articles, lays down that gold articles of only 14k, 18k and 22k karatages will be allowed in the mandatory hallmarking to become applicable in June 2021. This specifically excludes the sale, storage and exhibition of all the other karatages of gold articles. The BIS, by not recognizing the other karatages has imposed a fetter on the freedom of jewellers to sell articles of different Karatages.

“Several Indian court judgements highlight the difference between regulation and prohibition of a trade by the government. The Supreme Court has also emphasized that a prohibition imposed on the fundamental right to carry on trade and commerce cannot be regarded as reasonable if it is imposed not in the interest of the general public,” GJC said.

Even international standards approve all kinds of karatage (9K to 24K) and lay down no restriction. The Watal Committee has concluded that the government may consider a review of some of the provisions of the BIS Act and the draft regulations so that the interest of both the producers and consumers are harmonised while stipulating standards.

“The current restraint imposed by BIS is not in conformity with the prevalent international standards in the industry including the World Gold Council which has recognised purity and fineness of multiple karatages ranging from 9k to 24k. In India, gold is sold and bought in many variants ranging from 1k to 24k. Different regions have unique demands for different Karatages. Gold is also used as an investment option especially gold coins gold of 23k and 24k is highly preferred by the customers in India. BIS should include 23k and 24k in the list of approved karatages,” said Ashish Pethe, Chairman, GJC.

It is common to find 23k and 24k gold items in Akola, Kolhapur, Solapur, Pune and Jalgaon in Maharashtra while in Haryana, Punjab and Western Uttar Pradesh, they usually sell 20k and 21k.

“The restriction imposed on the Karatage of jewellery allowed to be sold and hallmarked must be reviewed in line of International practice, and the demands, both domestic and international. BIS should focus on its core objective of guaranteeing purity to the customer and Jewellers must be given the liberty to sell any karatage of jewellery that they intend to sell, and the consumer is willing to buy as long as it is hallmarked,” he added.

India has always been a country which is known for its traditional and hand-made jewellery. 24-carat gold is the purest form of gold and its softness allows it to be highly ductile and malleable.

“If the jeweller has the necessary machinery and expertise to manufacture articles and jewellery of 24-carat gold, he must not be denied of his right to do so,” said Saiyam Mehra, Vice Chairman, GJC.

Gold bullion in the form of bars and coins of 23k and 24k purity is often bought by customers in India as it is considered an investment option. If a customer wishes to buy a 23k or 24k Gold Jewellery, then why should there be any restrictions in buying a better purity of gold. The industry is already in crisis post covid lockdown in 2020 and now with the second wave coming in, things will be very much difficult even more. While international standards approve all types of karatages, restriction in karatages will add fuel to the fire”.

All jewellers are in favour of hallmarking however GJC has urged the government to consider postponing and extending the deadline for implementation of mandatory hallmarking of gold jewellery to June 2022 instead of June 2021 due to COVID-19.

GJC had already organised a national level industry meet to discuss the issues and problems in the mandatory hallmarking regime on 21st April 2021, wherein around 1400 jewellers had joined.

When the delegation from India went to China for World Gold Council and National Stock Exchange meet, it was discovered that 90 per cent of the total jewellery sold in China was 24k. Even in neighbouring countries like Nepal, Bangkok, Bangladesh, Sri Lanka the sale of jewellery of 24k was popular.

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Mines to Market
Prashant Rathod
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