Presentation on Presentation on Hallmarking Scheme for GoldHallmarking Scheme for Gold

bybyParminder Bajaj, Parminder Bajaj,

Scientist F & Head HallmarkingScientist F & Head HallmarkingBureau of Indian StandardsBureau of Indian Standards

28 July 2007 28 July 2007

33rdrd International Gold Summit, N.Delhi International Gold Summit, N.Delhi

Gold Consumption – Key Markets Gold Consumption – Key Markets & Indian Scenario& Indian Scenario

Annual Gold Consumption in key markets (in Tonnes):

China – 552, USA – 405, Middle East – 408, Turkey – 260, Saudi Arabia – 165, U.A.E – 115, U.K – 72

Annual Gold Consumption in India - 800 Tonnes• For Jewellery - 80%• For investment - 15%• Industrial use - 5%

Jewellery Industry Profile in India (Estimated)• Jewellers/Retailers/Manufacturers > 3,00,000• Large scale units 100

Need to Regulate QualityNeed to Regulate Quality

• High Gold Consumption in India• Low Purity Index

• Ensuring Value for money for consumer• Providing third party assurance on

purity for consumers

Market SurveyMarket SurveyAll India Average

2001 2006 (120 Samples in 8 Cities) (162 samples in 16

cities)

• Samples Failing 89 % 90 %• Average shortage in purity 11% 13.5%• Highest Purity Shortage 38.6% 44.66%

2001 – Delhi,Mumbai, Chennai, Hyderabad, Jaipur, Bangalore, Ahmedabad & Kolkata

2006 - New Delhi, Gurgaon, Kanpur, Meerut, Ludhiana, Chandigarh, Jammu, Jaipur, Jodhpur, Indore, Thiruvananthapuram, Madurai, Pune, Vadodara, Bhubaneshwar, Ranchi,

What is HallmarkingWhat is Hallmarking

• Hallmarking - The accurate determination and official recording of the proportionate content of precious metal .

• Hallmarks - Official marks used in many countries as an assurance of purity or fineness of precious metal

Launch of Hallmarking Launch of Hallmarking Scheme in IndiaScheme in India

• BIS launched Hallmarking Scheme in April 2000 for Gold Jewellery

• Gold Medallions were covered in Sept. 2005

• Jewellery & Artefacts of Silver were covered in Oct. 2005

Objectives of Hallmarking Objectives of Hallmarking SchemeScheme

• To protect consumer against the purchase of gold jewellery with lesser than declared purity

• Develop export competitiveness• Make India as a leading gold

market in the world

BIS Hallmarking BIS Hallmarking SchemeScheme

The scheme, voluntary at present is operated as Third Party Certification Scheme and involves :• Certification of Jeweller (retailer)/ Jewellery

manufacturer through grant of licence• Recognition of Assaying and Hallmarking

Centre according to BIS prescribed criteria • The scheme is for :Gold Jewellery/Artefacts (Medallions) Silver Jewellery/Artefacts

Certification of JewellerCertification of Jeweller

• As per IS 1417: 1999 Gold and Gold alloys, Jewellery / Artefacts – fineness and marking - specification (aligned with ISO 9202:1991)

• Doc: STI/1417/4 Scheme for Certification of Gold

Grades of Gold Covered in Grades of Gold Covered in IS 1417 & ISO 9202IS 1417 & ISO 9202

IS 1417 ISO 9202

Fineness Fineness

995 Standard Gold (for medallions)

958 23 Carat }916 22 carat } 916875 21 Carat } Gold for 750 18 Carat } Jewellery and 750585 14 Carat } artefacts 585375 9 Carat } 375

No Negative Tolerance Permitted on Fineness/Purity

IS 1417:1999 RequirementsIS 1417:1999 Requirements • Gold alloy including solders for manufacturing

jewellery/artefacts shall be free from cadmium, iridium & ruthenium

• Solders used shall be of same fineness as that of jewellery/artefact except 23 carat jewellery/artefact

– IS 3095 :1999 Gold solders for use in manufacture of jewellery- Specification (first revision)

– IS 2790:1999 Guidelines for manufacture of 23,22,21,18,14 and 9 carat gold (first revision)

IS 1417:1999 RequirementsIS 1417:1999 Requirements

• Gold jewellery/artefacts which may not be Hallmarked are those:

– fail to comply with specified fineness/caratage.– which is not solid or which is made with a hollow

center and then filled with base metal, cement, lac or other foreign substance thereby giving the article a false or added weight or strength unless the weight of gold is indicated on the article along with the jeweller’s/ sponsorer’s logo.

– Gold article/ornament on which it is physically impossible to stamp the marks.

Components of BIS Components of BIS HallmarkHallmark

• BIS Hallmark

• Purity /Fineness Mark 916 • Centre’s Mark (example) MMTC • Jeweller’s Mark (example) TBZ• Code Letter for the Year

of Marking H for 2007

Display Requirements in Display Requirements in the Shop the Shop

• Hallmarked Jewellery / Artefacts available here.• BIS Licence Number. CM/L-• Hallmark illustration and definition of each component

BIS LOGO PURITY

• The relationship of fineness of gold jewellery with caratage as specified in IS 1417958 = 23 C 916 = 22 C875 = 21 C 750 = 18 C585 = 14 C 375 = 9 C

• Magnifying glass (at least 10X magnification) for viewing hallmark available• Complete name and address

916 Hallmarking Centres Logo

Jewellers Logo

Year of Marking Code Letter

Recognition of Assaying Recognition of Assaying and Hallmarking Centreand Hallmarking Centre

• Based on Criteria for Recognition of Assaying and Hallmarking Centres

HMS /RAHC/G01- January 2001 for Gold(at par with Vienna Convention requirements)

• Assaying of Gold - According to IS 1418 (aligned with ISO 11426) &

• Centres to obtain Accreditation as per ISO/IEC 17025 from NABL

Steps in Assaying and Steps in Assaying and HallmarkingHallmarking

• Receipt of Jewellery and its segregation article wise

• Checking for homogeneity of the lot by XRF • Sampling by Scraping/ Micro Drilling/ Cutting

etc. • Assaying of the composite sample as per IS

1418 by Fire Assay Method• In case the sample passes , entire Jewellery lot

is hallmarked by laser marking and returned to the Jeweller

• In case of failure in fire assay, Jewellery is returned back without hallmarking

Fee StructureFee Structure• Application-cum-Processing Fee : Rs.2000/-• Certification Fee (As applicable) :

– Rs. 25000/- for a period of 3 years for location in Metropolis (Delhi, Mumbai, Kolkata & Chennai)

– Rs. 20000/- for a period of 3 years for location in State/District Head Quarters

– Rs. 10000/- for a period of 3 years for location in other than Metropolis & District Head quarters

• Second licence in the same premises - no additional certification fees.

• 25% discount for Multi-Chain outlets • Renewal Application-cum-Processing Fee : Rs.1000/- • Taxes applicable 12.36% as service tax &

education cess

Hallmarking ChargesHallmarking Charges

• Hallmarking charges depending upon weight of article is payable by jeweller to the hallmarking centres

Wt. of Article (for Gold) Charges/articleUpto 20 gm Rs. 18 From 20 – 100 gms Rs. 50Above 100 gms Rs.100Minimum charges for a consignment shall be Rs. 300/-

Consumer ProtectionConsumer Protection

• Consumers can get hallmarked jewellery tested from any A&H Centre

If found lesser than marked purity-Testing charges to be refunded to jeweller who hallmarked Jewellery

-Jeweller obliged to satisfy the customer through replacement

Initiatives by Govt.Initiatives by Govt.

• Central Scheme for Setting up of A&H Centres in 35 select districts with one time Financial Assistance @15% of Cost of Machinery & Equipment subject to maximum of 15 lakhs per centre

• Effective Consumer Awareness Campaign thru’ Print & Electronic Media

• RBI Circular to Banks for Preferential treatment to Hallmarked Jewellery while granting Advances against Jewellery – November 2005

• Letter to Chief Secretaries of States/UTs for promotion of Scheme

• Mandatory Hallmarking w.e.f. 1 January 2008

Initiatives by BISInitiatives by BIS

• Regular Awareness Programmes for the Stakeholders across the country

• A film on hallmarking for projection during consumer awareness programmes

• Simplification & Rationalization of BIS Hallmarking scheme

• Formulation of Hallmarking Regulations for legal back up

Simplification & Rationalization of Simplification & Rationalization of Hallmarking SchemeHallmarking Scheme

Earlier After Simplification

Rationalization of Fee Structure

Rs. 25,800/- per annum

In Delhi, Mumbai, Kolkata & Chennai – Rs. 25,000/- for 3 years In District Head Quarters – Rs. 20,000/- for 3 years In other areas - Rs. 10,000/- for 3 years

Application Form

Common for all products

Separate Form for Hallmarking - More Realistic & Simplified

Time Taken for G.O.L

30 days with Preliminary Insp.

7 days without Preliminary Inspection

Operation of Licence

Elaborate Records required

Records not required

Progress of Gold Hallmarking Progress of Gold Hallmarking Scheme since launch in Scheme since launch in

April 2000April 2000

Growth

31 Mar. 2001

31 Mar. 2002

31 Mar. 2003

31 Mar. 2004

31 Mar. 2005

31 Mar. 2006

31 Mar. 2007

25 July 2007

No. of Licences

186 286 560 795 935 1410 3466 4106

No. of Centres

8 12 13 15 24 36 45 55

Articles Hallmarked (in lakhs)

0.936 4.766 14.93 31.4 62.4 115 210.33

254.66 (As on 30 June 07)

Licences granted for Silver since launch = 298

Region - wise Region - wise DistributionDistribution

Region Licences Centres Gold Articles Gold ( Silver) Hallmarked

(in lakhs) (As on 25 July 2007) (As on 30 June 2007)

Central 551 (87) 11 18.21Northern 298 (56) 1 -Eastern 670 (19) 3 35.34Western 1386 (89) 13 77.45Southern 1201 (47) 27 123.65Total 4106 (298) 55 254.66

Statewise No. of Licences Statewise No. of Licences for Gold(Silver)and A&H for Gold(Silver)and A&H

CentresCentres

STATES WITH NO LICENCE : SIKKIM, ARUNACHAL PRADESH, NAGALAND, MANIPUR, MIZORAM, MEGHALAYA, DADRA NAGAR HAVELLI, LAKSHADWEEP, ANDAMAN & NICOBAR

State/U.T Licence Centres State/U.T Licence Centres

DELHI 313 (52) 6 MAHARASHTRA 680 (20) 8

RAJASTHAN 86 (6) 1 GUJARAT 696 (69) 5

M.P 67 (20) 2 DAMAN & DIU 3 0

CHATTISGARH 22(3) 1 TAMIL NADU 465 (7) 9

UTTRANCHAL 18 (2) 0 KERALA 310 (2) 11

U.P 102(15) 1 A. P 222 (7) 3

PUNJAB 62 (3) 1 KARNATAKA 178(30) 4

HARYANA 105 (34) 0 PONDICHERRY 26(1) 0

CHANDIGARH 35 (4) 0 WEST BENGAL 427(1) 3

J & K 9 0 JHARKHAND 57 (2) 0

H.P 30(4) 0 ORISSA 70 (1) 0

ASSAM 18 (5) 0 BIHAR 81(10) 0

GOA 7 0 TRIPURA 17 0

Impact of InitiativesImpact of Initiatives

Earlier After Simplification

Growth in No.of Licences

1080 licences granted in about 6 years upto 31 Dec. 2005

3188 licences granted since January 2006 in 18 months

Average Growth in No. of Licences/ month

16 177

International International AccreditationAccreditation

• Vienna Convention, 1972 - Convention on The Control And Marking of Articles of Precious Metals – Hallmarking Convention

• 18 Member Countries : Austria, Finland, Norway, Portugal, Sweden, Switzerland and the United Kingdom, Denmark, Ireland, Israel, The Czech Republic, The Netherlands, Latvia, Lithuania and Poland, Hungary, Cyprus, Slovak Republic

• In the process of acceding :Slovenia and the Ukraine • Others interested countries : Bahrain, China, India,

United Arab Emirates, Uzbekistan

Role and Functions of the Role and Functions of the Hallmarking ConventionHallmarking Convention

• Objective of the Hallmarking Convention :

Facilitate trade in precious metal articlesMaintaining fair trade and consumer

protection justified by the particular nature of these articles.

• For that purpose, the Hallmarking Convention has introduced the first international hallmark – the Common Control Mark (CCM) – indicating the precious metal and its fineness.

Requirements of Vienna Requirements of Vienna Convention, 1972Convention, 1972

• Country to be member of UN or similar body

• National Hallmarking scheme• Appropriate legislation on hallmarking• Independent assaying centres which

meet the requirements of ISO/IEC 17025 (NABL Accreditation)

• For further details of the convention please visit www.hallmarkingconvention.org

International Accreditation-International Accreditation-Indian StatusIndian Status

• Indian is No. 1 based on production of gold jewellery of 539 tonne in 2005 followed by Italy of 228 tonne

• Indian Export of Gold Jewellery during 2005 – Rs. 171.12 billion & expected to be at similar level in 2006-07

• India as major player in Gem & Jewellery exports is considering joining Vienna Convention for easy access to European markets and enhanced image of Indian Jewellery

• The existing infrastructure of certification is technically at par with the Convention Requirements

• Adequate experience of jewellery certification available• Setting up of Independent assaying centre/referral lab and

separate Hallmarking Regulations is under process• Participation in Vienna Convention meetings

Emerging Trends & Emerging Trends & Challenges AheadChallenges Ahead

• Implementation of Mandatory Hallmarking for Gold Jewellery from 1 January 2008 as decided by Govt. of India involving: Setting up of large No. of A&H Centres Innovative Licensing Mechanism for Over 3 lakh Jewellers Regulatory Mechanism including Surveillance Requirement of Infrastructure & Manpower for BIS Involvement of State Govts. etc. in co-operation with the Major

Stakeholders• Training of Artisans and Jewellers • Stepping Up of Awareness / Publicity Efforts during

2006 & 2007 • Boosting Exports of Gold Jewellery• Becoming Member of the Vienna Convention

Contact DetailsContact Details

Head (Hallmarking Department)Bureau of Indian Standards9, Bahadur Shah Zafar Marg

New DelhiPhone : 011-23234223

E mail : cmd4@bis.org.inWebsite : www.bis.org.in

Thanks for the

Attention