Following a writ petition filed by All India Gem & Jewellery Domestic Council (GJC), the Nagpur Bench of the Bombay High Court passed an interim order on 7 May 2021 to stop the Bureau of Indian Standard (BIS) from taking any coercive action on jewellers who may not be able to comply with the BIS’s mandatory gold jewellery hallmarking from 1 June 2021, due to the lack of infrastructure.
Mandatory hallmarking had meant that the jewellers would have been able to sell only hallmark-certified 14 carat, 18 carat or 22 carat gold jewellery. This rule has been withheld from application now. According to BIS, mandatory hallmarking was to protect consumers against lower caratage and ensure that they got the purity as marked on the ornaments.
Earlier last month, GJC, representing the domestic jewellery industry of over 500,000 jewellers across the country, had urged the Union Ministry of Consumer Affairs, Food & Public Distribution to postpone the deadline for mandatory hallmarking of gold jewellery by a year. The mandatory gold jewellery hallmarking was to be implemented from 1 June 2021. Apart from the lack of adequate infrastructure, the industry claimed, it was also hampered by the ongoing slowdown, following Covid-19 pandemic, from bringing into effect the mandatory instructions.
Hallmarking for gold jewellery had started in April 2000 as a voluntary scheme and, today, about 40 per cent of the gold jewellery sold in the country is being hallmarked. By making hallmarking mandatory, the government aims to streamline the domestic jewellery business and ensure that all the gold jewellery sold in the country is hallmarked by the BIS.
“The court realised the gravity of the situation in the wake of the lack of infrastructure and the hardships faced by jewellers,” says Ashish Pethe, chairman, GJC. “And so, it ruled that no coercive action shall be taken against jewellers under Sec 29(2) of BIS Act 2016, implying that the government cannot imprison jewellers or levy fines for any such default. The order is an interim one till the matter is again heard on 14 June 2021.We hope the BIS will realise the gravity of the order, try to resolve what the court has envisaged and hold mandatory hallmarking back till things are fixed by the industry, which is equally interested in hallmarking applied in a reasonable manner”.
Hardships to jewellers
“The writ has been admitted on merit and notice has been issued to the BIS and all respondents,” informs Dinesh Jain, director, GJC, who represented GJC in the writ petition filed. “BIS will to know what to do in such a situation and we are sure that it shall not proceed with the mandatory hallmarking without doing proper homework. In full support of hallmarking, GJC had appealed that a ‘High Level Committee’ be constituted by the court to streamline and resolve all issues for the benefit of consumers, jewellers and core objective of BIS.”
The contention is that the new regulation making it compulsory to hallmark gold jewellery before it is stored or sold is likely to result in great hardships to jewellers since the infrastructure for carrying out hallmarking is still not adequate enough. Out of the 733 districts in the country, only 245 districts now have assaying and hallmarking centres (as per BIS data) and hence GJC urges the BIS to ensure that there is at least one A&H centre in each district in the country. GJC wants properly accredited, fully functional A&H centres in all districts with proper infrastructure and trained personnel, prior to the requirement of mandatory hallmarking being enforced.
There are various operational and procedural issues in relation to implementation of the mandatory requirement. This will also severely affect the jewellery industry, leading to drastic consequences such as cessation of business, loss of livelihood, litigation and unnecessary waste of time and energy
According to BIS data, there are 940 assaying centres in 245 districts across India and the number of jewellers registered with BIS is 31,585. However, there is no presence of hallmarking centres in 488 districts. Even the existing centres are concentrated only in and around the urban area or clusters, where there is heavy concentration of jewellers. Only 8 per cent of the entire country has the access to A&H centres.
It is further submitted that there are about 60 billion pieces of jewellery that need to be hallmarked. Further contention is that, if there is any breach of the said mandate of the law as provided under Sections 14 and 15 of the Bureau of Indian Standards Act 2016, there is a provision of penalty (punishable with maximum imprisonment of one year) under Section 29 of the BIS Act. It is also submitted that, within the time frame, it would not be possible for all the jewellers and for every piece of jewellery available at present to be hallmarked.
“There are various operational and procedural issues in relation to implementation of the mandatory requirement,” argues Pethe. “This will also severely affect the jewellery industry, leading to drastic consequences such as cessation of business, loss of livelihood, litigation and unnecessary waste of time and energy”.
In November 2019, the Centre had notified that hallmarking of gold jewellery and artefacts would be made mandatory across the country from 15 January 2021. The deadline was extended to 1 June 2021 after the jewellers sought time in the wake of the Covid-19 pandemic.