So, you want to buy gold. But do you buy it with due care? Few important questions that you must consider while purchasing gold are -
While India has over 13,700 BIS-hallmarked jewellery showrooms and 435 BIS recognised assaying and hallmarking centres, there are still wide swathes of the country where no hallmarking centers are available.
Even though, on average, 30% of jewellery is now hallmarked – of which 80% are high-value items and only 10% low-value items – and even with hallmarked jewellery concerns remain about the quality and credibility of some hallmarking centres.
This makes it imperative for you to ensure that the gold you are buying is from a BIS (Bureau of Indian Standards) hallmarked jeweller.
Of even greater importance is to ensure that the ornament bought carries the BIS hallmark.
The complete list of hallmarked jewellers - can be found on BIS website.
In case you have any complaints and concerns about hallmarking, you can contact BIS as well.
A BIS hallmark sign remains the benchmark you need to insist upon when buying gold.
Buyers beware. The lack of BIS-hallmark-certified jewellery is particularly rampant in rural India, which accounts for over 60% of our annual jewellery consumption. So even if gold is cheaper in a smaller town or your village, don't buy it unless it is hallmarked.
Check the per gram price of gold
Always check the per gram price of gold ahead of your purchase.
The means of arriving at it vary from city to city and are decided by various associations of gold jewellers. The biggest jewellers almost always sell at the same rate.
One way of ensuring that per gram price of gold is reliable is by checking in more than one well known showroom or you could check rates on reliable websites ahead of purchase.
How much gold are you really getting?
The pricing composition of gold jewellery is usually complicated.
On top of the per gram price, a buyer has to pay for wastage (which varies from ornament to ornament and the mechanism of calculating which only the jeweller knows). Additionally, there are making charges too, in some instances. Once you settle on a piece, making charges or a percentage of the wastage disappears from the pricing chart, but that hasn't simplified the picture for you, has it?
A better way of simplifying it all would be finding out how much gold you actually get in hand for the price you are paying.
For example, if the final price is Rs 30,000 for a 10 gm gold chain - you have essentially paid Rs 3000 per gram. Check the actual per gram rate on the day and see how much more you are expected to pay. If your heart is still in the deal post this calculation, only then go ahead.
Check on buy-back terms too
Also, check and see what your jeweller is willing to offer you if you were to return the gold jewellery at a later date and wish to exchange it for a more contemporary design.
Most top jewellers these days promise to buy back gold at the prevailing rate should you choose to go down this route.
While this means that you won't be compensated for the wastage that you paid for or the making charges, it means you at least have an assurance to fall back on.
Also, check if there is an exchange and buy-back period and policy and that you are aware about it. This will ensure that you can return your ornament in case you have any grounds for complaint.
The bill, please
To ensure all this, do insist on a bill.
Yes, you might have to pay value-added tax; you might have to share your PAN details too with the jeweller if your purchase is for an amount more than Rs 50,000.
But a bill that jots down every important detail of the purchase goes a long way towards ensuring transparency and providing you with assurance. It is something you can turn to, in case you are forced to approach a consumer court too.
It is also your contribution towards ensuring a more transparent gold market in the country.
Indirect investment refers to indirect ways of investing in gold such as gold ETFs, E-Gold, and gold futures. It is also called paper gold.
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