Mandatory hallmarking of gold: It is a win-win deal for buyers, sellers
(Authored by M. P Ahammed Chairman, Malabar Gold & Diamonds)
Successive government have brought many laws to ensure that the rights of consumers are non-negotiable. The hallmark of the Consumer Protection Act, 1986 passed by the Indian Parliament is to legally ensure cent percent value for money for the buyers of any articles of consumption. It is against this backdrop one should see the hallmarking for gold and gold articles made mandatory by the Government last year. The law will come into force from June 16 (Wednesday).
It goes without saying that the mandatory mandate to hallmark gold and gold articles may put an end to the practice of cheating consumers by scruple less sellers pushing inferior quality products to buyers under the subterfuge of lower prices. Hence, the law should be treated as a watershed moment in ensuring consumers’ right for buyers of gold articles as now they have an insurance against being duped by sellers. The Government, under the Consumer Protection Act is duty bound to legally protect the interest of buyers. By making hallmarking compulsory, the Government now ensures the best interest of buyers of gold and gold articles as the law protect their rights with a legal mechanism in case of some traders trying to cheat them.
To put things in perspective, Jewellers mix metals like zinc, silver etc with gold to ensure the durability of the ornaments since gold as a metal is fragile and is susceptible to breaking. Based on the quantity of other metals present in the gold, the Bureau of India Standards (BIS) categorises the gold into 18 carat, 22 carat etc with each category denotes the purity of gold. To ensure 22 carat purity, the law stipulates that each gram of ornament should have 91.6%gold. For 18 carat the norm is 75% and for 14 carat the mandatory gold content is 58.5%.
Though these quality stands were there for quite some time, these best practices were not practiced widely. It is to ensure that these standards stipulated by BIS are observed without fail that the Government is now making hallmarking compulsory. To provide hallmarking certificates the Government has authorised numerous private agencies to test for the purity and give certificates. Every hallmarked article should have the BIS hallmark label along with purity of gold clearly mentioned. Besides, names of the hallmarking agency and jewellery are also compulsory. Because of these labelling, in case of any foul play, the law enforcement agencies can trace the culprits easily. In the future, besides BIS hallmarking, the articles will carry a six digit unique identification number (HUID).
By making hallmarking mandatory, the consumers stand to benefit at three levels. The first and foremost is that consumers can rest assured about the purity of gold they buy. Second benefit is the higher resale or exchange value of gold articles since no one can reduce the prices of hallmarked gold citing low quality as an alibi. Legal protection to buyers of gold and gold articles is the third benefit.
As chairman of Malabar Gold and Diamonds, I can talk volumes about how consumers were being duped by some jewellers by pushing low quality gold articles. To ensure that our customers get 100 per cent value for the money, we have been selling only BIS hallmarked gold, for the past 21 years. Such a principled stand helped us to grow in business in leaps and bounds in the past. Currently only 30% of jewellers are selling BIS hallmarked gold. More, there are instances of jewellers cheating customers by selling duplicate hallmarked certificate aided and abettedby illegal certification agencies. Therefore, the Government should regularly inspect all the agents involved in hallmarking process to prevent any circumvention of law.
There are complaints from certain quarters that there are not sufficient numbers of agencies to certify the purity of gold. This is not correct. In fact, there are 965 hallmarking centres in the country and incidentally most of them are not functioning to their full capacity now. If their services were utilised then there will not be any issues in getting hallmarking certificates. Hallmarking will also put an end to the widespread practice of smuggling of gold into the country through illegal means. If the Government roll out the e-governance and tracking facilities, they will ensure compulsory hallmarking by everybody, thus putting an end to the illegal gold trade. The six number unique identification number, once implemented, will ensure compulsory hallmarking of all gold articles by all.
Hallmarking will also benefit gold jewellers immensely. By selling pure gold, they could gain the trust of their customers and thus grow in business. Hence the entire industry should support the Government move to make hallmarking compulsory.