BIS hallmarking and the 6-digit HUID: what jewellers can (and can't) still sell after 1-Apr-2023

The scene

It is festival week near Charminar. A family showroom has a 22K bangle set carrying the old four-mark hallmark: the BIS logo, purity mark, assaying and hallmarking centre mark, and jeweller identification mark.

The set has been in the family’s inventory for years. A salesman is told to move it quietly to a walk-in buyer. The prevailing advice is familiar: “The gold is genuine. BIS becomes a problem only if somebody complains.”

Then somebody does.

The buyer checks the jewellery, cannot find a six-digit HUID and demands an explanation. What began as an inventory issue can become a consumer complaint, a BIS inspection and seizure question, and scrutiny under the Consumer Protection Act, 2019. Local trade-licensing or municipal scrutiny may follow, although hallmarking enforcement itself rests principally with BIS and the authorities empowered under the BIS framework. The jeweller’s registration and the traceability of other stock may also come under examination.

The practical lesson is simple: an old hallmark is not a licence to put newly manufactured or reworked jewellery into circulation without HUID.

The three dates that matter

The legal framework rests on section 14 of the Bureau of Indian Standards Act, 2016, read with the BIS (Hallmarking) Regulations, 2018 and the applicable rules and notifications.

15-Jun-2021  — Mandatory hallmarking begins in 256 Phase I districts
               under Ministry of Consumer Affairs Notification
               G.S.R. 415(E), dated 15-Jun-2021.

04-Jun-2022  — Phase II expands mandatory hallmarking to another
               32 districts under G.S.R. 427(E).

01-Apr-2023  — Six-digit alphanumeric HUID becomes mandatory for
               new hallmarking under the Ministry order dated
               24-Mar-2023. The old four-mark format is no longer
               permissible for newly hallmarked items.

05-Sep-2023  — Phase III adds another 55 districts under
               G.S.R. 634(E). Expansion has continued beyond
               these phases through further notifications.

Two different questions must therefore be kept separate: whether mandatory hallmarking applies in the district of sale, and whether an item newly presented for hallmarking after 1-Apr-2023 carries the required six-digit HUID.

What “old stock” means to BIS today

“Old stock” is not a description that can safely be applied merely because a design looks dated or an invoice has been back-entered.

Genuine pre-cut-off four-mark inventory

BIS FAQs and Ministry press statements have addressed genuine old-hallmarked jewellery already held by retailers at the relevant notified transition point. Such stock has received specific transitional treatment.

That position should not be converted into a general permission to sell any non-HUID item indefinitely. The jeweller must be able to establish that the article is genuine four-mark inventory covered by the applicable clarification, supported by purchase records, stock registers, hallmarking records and item-level identification.

There have been multiple clarifications during the transition. Jewellers should rely on the precise clarification applicable to their stock rather than an informal extension date circulated through trade groups.

Jewellery melted or remade after 1-Apr-2023

Once old jewellery is melted and converted into a new bangle, chain, ring or other article, it is new manufacture. Its historical four-mark status does not travel through the furnace.

Before resale as hallmarked jewellery, the newly manufactured article must undergo current assaying and carry a six-digit HUID.

New goods carrying an old-format mark

Applying or using the discontinued four-mark presentation on newly manufactured goods is not an old-stock transaction. It can amount to misuse of the Standard Mark and attract action under section 29 of the BIS Act, 2016.

That provision permits prosecution and financial penalties, including a minimum penalty that may reach ₹1 lakh and a penalty linked to as much as five times the value of the goods, depending on the contravention and statutory conditions.

The six-digit HUID mechanic

Every article hallmarked under the current system carries a unique six-digit alphanumeric Hallmark Unique Identification.

The HUID connects the article to its recorded purity, the BIS-registered jeweller and the recognised assaying and hallmarking centre. A consumer can use the “Verify HUID” facility in the BIS Care app to check the recorded particulars.

This changes the enforcement environment. Under the old system, a buyer often depended on the retailer’s explanation. Today, a mismatch can be detected at the counter: wrong purity, different article details, an untraceable number or a HUID associated with another jeweller.

HUIDs should therefore be treated as item-level compliance data, not merely as tiny characters stamped on gold.

The four-mark stock trap

The immediate attraction of quietly moving non-HUID stock is avoiding melting loss, making charges and fresh hallmarking logistics. The hidden cost is much larger.

BIS may inspect stock, draw samples and seize goods where the statutory conditions are met. A buyer may seek replacement, refund, compensation and costs under the Consumer Protection Act, 2019. Apparent misuse of hallmarking can expose the retailer to prosecution under section 29 of the BIS Act, 2016. Criminal proceedings and challenges are governed by the Bharatiya Nagarik Suraksha Sanhita, 2023; section 482 concerns the High Court’s inherent powers and should not be treated as the provision under which an ordinary consumer complaint is filed.

One disputed article can also create a cascade: the authorities may ask how similar stock entered the books, whether HUID records reconcile, and whether the jeweller’s BIS registration details and invoices are accurate. Imported articles may additionally raise Customs Act exposure if their description, origin, valuation or compliance declarations are false.

Categories now allowed

Since 6-Aug-2018, the permitted gold purities for new hallmarking are:

• 14K
• 18K
• 20K
• 22K
• 23K
• 24K

New jewellery described as 21K, 19K, 12K or another unapproved karat cannot be sent through the current gold-jewellery hallmarking system under an invented equivalent.

Mixed-karat articles need particular care. A retailer should not represent the whole item as one hallmarked purity if solder, components or detachable parts cause it to fall outside the applicable standard. If an item cannot lawfully receive the required hallmark, the safe commercial response is to melt and remake it into an approved purity—not to sell it using ambiguous language such as “tested gold.”

Any jeweller selling hallmarked gold must hold BIS registration. Under the current regime, this is a one-time registration without periodic renewal, but changes in constitution, premises or registration particulars must still be handled correctly.

The old-gold exchange rhythm

A customer in Hyderabad or Vizag walks in with old 22K bangles and wants a new set. The inward transaction and the later outward sale must be documented separately.

Path one: purchase from an unregistered person

The jeweller may purchase the old gold on weight and valuation basis as an unregistered-dealer purchase. The file should record the customer, article description, gross and net weight, testing or melting deductions, rate, valuation, payment mode and linkage to the exchange invoice.

GST Rule 32(5)’s margin method is available only where its conditions for second-hand goods are satisfied, including the restriction on input-tax credit and the requirement that processing must not change the nature of the goods. Melting old jewellery and manufacturing a new article ordinarily changes that analysis; the margin scheme should not be assumed automatically.

Section 194Q of the Income-tax Act must also be checked where the purchasing jeweller’s preceding-year turnover exceeds ₹10 crore and purchases from a resident seller exceed ₹50 lakh in the financial year, subject to the provision’s exclusions and interaction with other TDS/TCS rules. A normal household exchange will rarely cross that seller-wise threshold, but purchases from regular bullion or scrap suppliers may.

Path two: melting and remaking

If the old bangles are received for melting and conversion, the inward memo should preserve the metal trail through testing, melting, refining, manufacture and wastage.

The resulting jewellery is a new article. Before it is offered for resale, it must be assayed and hallmarked under the current system with a six-digit HUID.

What a recurring CA and BIS-adjacent engagement looks like

BIS compliance should sit inside the jeweller’s accounting rhythm rather than in a separate file opened only during an inspection.

A quarterly review should reconcile physical HUID-tagged inventory with purchase invoices, assaying and hallmarking records, the BIS portal trail, sales invoices, repairs, exchanges, melts and job-work movements. Exceptions should be quarantined until the article and documentation agree.

The engagement should also maintain a consumer-complaint escalation procedure: preserve the item and invoice, verify the HUID, stop sale of related stock, obtain assay evidence where necessary and decide promptly whether replacement or refund is appropriate.

There is presently no periodic BIS registration renewal for jewellers, but Ministry and BIS updates should be monitored. The same calendar should coordinate GST, the Rule 32(5) margin scheme where valid, income-tax audit under section 44AB, section 269ST cash restrictions and applicable PMLA/FIU-IND reporting obligations, including CTR processes.

Frequently asked questions

Can I still sell four-mark hallmarked jewellery bought before April 2023?

Genuine old-hallmarked inventory may fall within BIS’s specific transition clarifications if it was held at the relevant transition point and is properly evidenced. Do not invent or rely on a WhatsApp extension date. Where documentation is incomplete or the item has been altered, the conservative course is to melt or reprocess it and obtain a fresh HUID before sale.

What if I sell in a district not yet covered by Phase I, II or III?

Mandatory hallmarking applies according to the districts notified from time to time, so the current notification covering the place of sale must be checked. But expansion is continuing. Building an inventory model around a temporary district exception creates stranded-stock and consumer-representation risk.

The consumer’s HUID does not match the BIS Care app entry. What is my liability?

Immediately stop treating the item as compliant and preserve the invoice, tag and procurement trail. A mismatch can support refund, replacement, compensation or other relief under the Consumer Protection Act, 2019 and may expose the jeweller to BIS Act, 2016 section 29 proceedings if the mark was misused or the representation was false.

How is BIS registration different from GST and FIU-IND registration?

They serve different laws. BIS registration governs the jeweller’s use and sale of hallmarked jewellery. GST registration governs indirect-tax supplies and reporting. FIU-IND registration and reporting arise under the PMLA framework where the business falls within the notified reporting regime. Each requires its own records, responsible person and compliance calendar.

Do I hallmark 24K coins?

Gold bullion and coins are outside the mandatory jewellery-and-artefacts hallmarking scheme discussed here and are governed by separate standards and notifications. Do not treat a jewellery HUID requirement as automatically applicable to a 24K bullion coin; first identify the product category and the specific governing standard.

Bring HUID into the main compliance calendar

Harun Raaj & Associates integrates BIS stock hygiene with the jeweller’s wider compliance rhythm, including PMLA CTR reporting, section 269ST, the GST margin scheme and tax audit under section 44AB.

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