May 10, 2024, New Delhi: Dhan Teras and Akshaya Tritiya are two days, on which many in India consider buying gold as auspicious. After the Bureau of Indian Standards (BIS) made hallmarking of gold items mandatory in 256 districts of India which was later expanded to 343 districts in September 2023, LocalCircles on the occasion of Akshaya Tritiya concluded a comprehensive national survey to gather pulse of the consumer on how it is working on the ground.

Hallmarking gives an assurance about the quality of gold or silver consumers purchase as every item carries a mark mentioning the purity of gold or silver used in making. It is a means to protect consumers who earlier would just buy based on faith in the jeweller with cases of cheating and misleading happening often. The BIS has been making hallmarking mandatory in a phased manner to ensure necessary infrastructure is created for assaying of gold articles. The Government’s plan is to eventually make hallmarking of jewellery and other gold items mandatory in all 766 districts in the country. Hallmarking of gold items whether bar, coin, or jewellery is done with a six-digit alphanumeric Hallmark Unique Identification (HUID).

Purity of gold sold has always been of concern for household consumers in India. Across the country, a common consumer complaint was about being charged for 22 carat gold jewellery whereas in reality it was just 18 carat gold and many finding that out when they tried to remake or sell it. With buying of gold largely being done by consumers in cash, reporting the fraud to local police meant creating more problems than getting redressal. Hallmarking helps people know what they are buying and pay accordingly. The six-digit HUID number is unique to each piece of gold. It avoids mis-selling, guarantees quality, and helps in tracing the item to the maker, whether handcrafted or machine made. The hallmarking is not done by the jewelers but by BIS recognized Assaying and Hallmarking Centres. The government has been stressing that hallmarking only adds marginally to the cost – Rs 45 per article, but it gives indication of the purity of gold coin, jewellery or other artefacts whether 22 carat or lower carats. Each piece also bears jeweler’s identification and the year of marking. This helps consumers make an informed decision.

To understand how hallmarking has been working on ground over the last 12 months, LocalCircles through a national survey sought to understand consumer experiences behavior with jewellery hallmarking. The survey received over 34,000 responses from consumers located in 307 districts of India. 62% respondents were men while 38% respondents were women. 46% respondents were from tier 1, 36% from tier 2 and 18% respondents were from tier 3 & 4 districts. All the districts selected for the survey were those where hallmarking has been made mandatory.

27% of respondents bought gold jewellery which was not hallmarked in the last 12 months

“In the last 12 months when you or your immediate family bought gold jewellery, was it hallmarked?” This query received 11,811 responses with 65% or nearly 2 in 3 indicated “yes”; 27% stated “No” it was not hallmarked and 9% opted for “can’t say”. The data shows growing awareness among consumers about the need to extend hallmarking given its positive outcome when buying gold though 27% of respondents still bought gold jewellery which was not hallmarked. 27% of these respondents who bought one or more gold jewellery article resided in a district where hallmarking was mandatory. This indicates that while the Government has made hallmarking mandatory, jewellers are still selling gold articles that are not hallmarked and consumers are still buying them.

8% of respondents revealed that they did not get the GST receipt as “we had to buy in cash”

Apart from hallmarking cost, which is minimal in percentage terms, the GST adds to the overall cost of buying gold jewellery for consumers and makes it a recorded transaction from a taxation and consumer redressal perspective. Gold jewellery attracts 3% GST as a fixed percentage of the value of gold and 5% GST on the making charges. The survey next sought to know from consumers whether they took a GST receipt when buying gold jewellery, It asked them, “In the last 12 months when you or your immediate family bought gold jewellery, did you take a GST receipt from the jeweler?” This query received 11,299 responses with 86% of the respondents indicating “yes” they got the receipt, but 8% revealed that they did not get the GST receipt as “we had to buy in cash” while 6% did not give a clear response. In all, 14% of those who purchased gold jewellery in the last 12 months did not take receipt of their purchase as they gave payment in cash or wanted to avoid GST. Consumers who avoid taking a GST receipt do not realise that they are giving up on redressal possibilities in case the jewellery they purchased turns out to be of inferior quality than what they paid for.

15% of those surveyed indicated they paid more than 20% cost for hallmarked jewellery

While assaying and hallmarking costs are not high, consumers don’t always ask for hallmarked jewellery or insist on seeing the hallmark before finalizing what to buy. At the same time some consumers wrote on LocalCircles about jewellers charging premium for hallmarked jewellery. The next survey question sought to understand this aspect and its asked consumers who bought gold jewellery in the last 12 months, “How much more expensive was the hallmarked gold jewellery in comparison to non-hallmarked one?” This query received 11,463 responses of which 71% indicated that they had to pay 10% or more for the hallmarked jewellery. The data shows 56% paid 10-20% more as additional cost for hallmarked jewellery; while 15% paid 0-10% more as additional cost; another 15% paid more than 20% cost for hallmarked jewellery. Only 14% of those surveyed said that they paid nothing extra for hallmarked jewellery.

The survey results bring out the fact that 71% buyers of hallmarked gold jewellery have had to pay 10% or more as additional costs for their purchases in the last 12 months. It is clear that consumers need to be educated more about the costs involved in hallmarking and that there should be no extra charges. Without this information many consumers may continue to flock to their “reliable” goldsmith to buy gold jewellery sans hallmark. Some of the local goldsmiths may not even be registered, and outside the GST purview. As it is 14% of those surveyed indicated that they did not take the GST receipt when buying gold articles. The survey also reveals that despite the government striving to protect the consumers and spread awareness, only 64% of those who bought gold jewellery in the last 12 months bought hallmarked articles. BIS will have to drive enforcement in these 343 districts to ensure that no one is selling non-hallmarked jewellery and that significant charges are not being levied for hallmarking. One thing the Government could consider mandating is not permitting jewellers to quote and levy hallmarking charges separately to the consumer.

As always, LocalCircles will escalate findings of this study with BIS, CCPA and the Ministry of Consumer Affairs for their understanding and interventions to make gold hallmarking successful and consumer centric on the ground.

Explained: 71% paid 10-20% more for hallmarked gold jewellery in last 1 yr May 10, 2024While hallmarking awareness is increasing, a significant portion (27%) is still buying non-hallmarked jewellery https://www.business-standard.com/finance/personal-finance/explained-71-paid-10-20-more-for-hallmarked-gold-jewellery-in-last-1-yr-124050901407_1.htmlarticleBS

Golden Rule: Always Take GST Receipt For Gold Purchases; Here’s WhyMay 14, 2024While buying gold it is important to ensure two things, first, the article should be hallmarked, and second do not forget to get the GST receipt for your purchahttps://business.outlookindia.com/gold/golden-rule-always-take-gst-receipt-for-gold-purchases-heres-whyarticleOutlook

'In Punjab, people buying non-hallmark gold jewellery' | Chandigarh News - Times of IndiaJun 09, 2024The prevalence of purchasing non-hallmarked gold ornaments in Punjab raises concerns about consumer protection and the need for stricter enforcement of hallmarking standards. Learn more about the survey findings and consumer practices in Punjab regarding gold jewellery purchases.https://timesofindia.indiatimes.com/city/chandigarh/in-punjab-people-buying-non-hallmark-gold-jewellery/articleshow/110828409.cmsarticleTOI