Hallmarking Process in India: How It Works for Jewellers

Hallmarking of gold jewellery is a crucial step for ensuring purity and building consumer trust. The Bureau of Indian Standards (BIS) oversees this process, which involves specific steps and fees that jewellers must adhere to. Here’s a detailed breakdown:

1. BIS Registration for Jewellers

Before hallmarking, jewellers must register with BIS.

• Application Process:
  Jewellers apply online through the BIS portal, submitting required documents such as:
  • Business registration certificate
  • GST registration number
  • Identity and address proof of the proprietor/firm
• Fee Payment:
  • Registration Fee: ₹2,000 for a jeweller license.
  • Renewal Fee: ₹2,000 annually.
• Inspection and Approval:
  BIS may conduct a physical inspection of the jeweller’s premises to ensure compliance before granting a license.

2. Choosing a BIS-Recognized Hallmarking Center

Jewellers must work with an authorized Assaying and Hallmarking Center (AHC).

• Number of Centers:
  India has 1,622 BIS-recognized hallmarking centers (as of November 2024), covering urban and rural regions.
• Proximity Issues:
  Rural jewellers may face logistical challenges if a center is far from their location, increasing transportation costs.

3. Submission of Jewellery for Hallmarking

Jewellers submit their items for testing and hallmarking.

• Packing:
  Jewellery is sorted by karatage (e.g., 22K, 18K) and securely packed with weight and design details.
• Transport:
  Items are delivered to the hallmarking center via courier or in person.

4. Testing and Hallmarking Process

At the hallmarking center:

1. Purity Testing:
   • Initial testing via X-Ray Fluorescence (XRF) for non-destructive analysis.
   • Fire Assay for precise purity determination (destructive method).
2. Marking:
   Jewellery that meets BIS standards is stamped with:
   • BIS logo
   • Purity grade (e.g., 22K916)
   • Assaying center’s code
   • Jeweller’s identification mark
   • Hallmark Unique Identification (HUID) number

5. Collection and Verification

After hallmarking:

• Verification:
  Jewellers check for accurate marking and documentation.
• Display for Sale:
  Hallmarked jewellery is now ready for sale, assuring customers of its quality.

Fees for Hallmarking

1. Hallmarking Charges (Per Item):
   • Gold Jewellery: ₹45 per item (increased from ₹35 in 2022).
   • Silver Jewellery: ₹35 per item.
2. Renewal Fees:
   • Annual renewal for BIS registration: ₹2,000.
3. Additional Costs:
   • Logistics: Transportation and insurance for safe delivery of jewellery to the hallmarking center.
   • Delays: Turnaround time for hallmarking can delay inventory availability.

How Does Hallmarking Increase Costs for Jewellers?

1. Direct Costs:
   • Hallmarking fees, transportation, and insurance add to the operational expenses.
   • Example: A jeweller submitting 100 gold items pays ₹4,500 for hallmarking charges alone.
2. Indirect Costs:
   • Time Loss: Hallmarking can take several days, slowing inventory turnover.
   • Operational Overhead: Additional staff or resources to handle logistics and compliance.
3. Impact on Pricing:
   • These costs are often passed on to consumers, leading to slightly higher jewellery prices. For instance, a jeweller might increase the price by ₹100–₹500 per item to maintain profit margins.

Benefits and Challenges for Jewellers

Benefits:

• Consumer Trust: Hallmarked jewellery guarantees purity, increasing customer confidence.
• Market Transparency: Builds credibility and ensures fair practices.

Challenges:

• Cost Burden: Small jewellers find the hallmarking fees and logistics challenging to manage.
• Limited Accessibility: Rural jewellers face higher logistical costs due to fewer nearby hallmarking centers.

Conclusion

Mandatory hallmarking of gold jewellery ensures quality and consumer trust, but it increases costs for jewellers due to fees, logistics, and time delays. While larger jewellers can absorb these costs, smaller players often face operational challenges. Despite these hurdles, hallmarking remains a vital step toward greater transparency and integrity in India’s gold market.

Written by
Dr. Vinay Prakash Tiwari
Inventor of LTP Calculator
Founder of
Daddy’s International School
LTP Calculator Financial Technology Pvt. Ltd.
Investing Daddy Investment Adviser