How to Start a Jewellery Business in India: Licensing, Hallmarking, and Compliance

Starting a jewellery business in India involves navigating a specific set of regulatory requirements that differ from most other retail businesses. Mandatory hallmarking, BIS registration, GST compliance, and consumer protection laws create a regulatory framework that new jewellers must understand from day one.

Step 1: Business Entity and Basic Licensing

Choose a business structure — Sole proprietorship, partnership, LLP, or private limited company. Each has different tax, liability, and compliance implications. Consult a chartered accountant for the structure that suits your scale and plans.

Obtain a Shop and Establishment Licence — Register under your state's Shops and Establishments Act with the local municipal authority.

PAN Card — Obtain a Permanent Account Number for the business entity from the Income Tax Department.

Step 2: GST Registration

Gold jewellery attracts GST at 3% on gold value and 5% on making charges. Any jeweller with annual turnover exceeding Rs. 20 lakh (Rs. 10 lakh in special category states) must register for GST.

GST registration provides a GSTIN, which is required on all invoices, BIS registration applications, and interactions with hallmarking centres. Even below the threshold, voluntary GST registration is advisable for credibility and input tax credit benefits.

Step 3: BIS Registration for Jewellers

This is the critical step specific to the jewellery trade. Under mandatory hallmarking, every jeweller selling gold jewellery must be registered with BIS.

BIS registration is free — no fee is charged. The process involves applying online through the BIS portal (manakonline.in), providing business details, GSTIN, address proof, and photographs, and receiving a BIS Registration Number upon approval.

Once registered, you can submit articles for hallmarking at any BIS-authorized hallmarking centre and legally sell hallmarked gold jewellery.

Exemption note: Jewellers with annual turnover below Rs. 40 lakh are exempt from mandatory BIS registration but may register voluntarily. Given that consumer trust is essential in the jewellery business, voluntary registration is recommended even for small operators.

Step 4: Establish a Hallmarking Centre Relationship

Identify and establish a relationship with a BIS-authorized hallmarking centre convenient to your location. Key factors to evaluate include turnaround time, processing capacity, accreditation (IAGES or NABL), proximity, and experience.

All gold jewellery you sell must be hallmarked with a valid HUID before sale. Plan your inventory management around the hallmarking turnaround time.

Step 5: Understand Invoicing Requirements

Every sale of hallmarked jewellery requires a detailed invoice containing the jeweller's name, address, BIS registration number, and GSTIN; the article description and type; the purity grade (karat and fineness); the net weight of gold; the HUID number for each article; the gold rate applied; making charges (separate line item); CGST, SGST, or IGST as applicable; and the total amount.

Proper invoicing protects both you and your customers, and is essential for GST compliance.

Step 6: Consumer Protection Compliance

Under the Consumer Protection Act, 2019, and BIS Act, 2016, jewellers must sell only hallmarked gold jewellery (for registered jewellers), display the BIS registration certificate and hallmarking charges prominently, accept consumer complaints about purity discrepancies, and cooperate with BIS enforcement inspections.

The penalty for selling non-hallmarked gold jewellery includes imprisonment up to one year and fines up to five times the value of goods.

Step 7: Insurance and Security

Jewellery retail involves significant inventory value. Arrange comprehensive insurance covering stock, transit, and premises, install security systems including CCTV and alarm systems, and consider a bank locker for high-value inventory storage.

Step 8: Building Consumer Trust

In the jewellery business, trust is everything. New jewellers can build trust by prominently displaying BIS registration, encouraging customers to verify HUIDs in-store using the BIS CARE App, providing transparent, itemised invoices, offering a clear buyback policy at fair rates, and educating customers about hallmarking and purity verification.

Financial Planning

Key costs to budget for include initial gold inventory (the largest capital requirement), shop rent and interiors, BIS registration (free), hallmarking charges (approximately Rs. 35 per article), GST deposits, insurance, and security systems.

Common Mistakes New Jewellers Make

Purchasing stock from unverified sources — Always buy from established, reputable suppliers with proper documentation.

Not registering with BIS — Operating without registration exposes you to legal penalties and undermines consumer trust.

Inadequate record-keeping — Maintain detailed records of all purchases, hallmarking submissions, and sales with HUID cross-references.

Ignoring silver hallmarking — With silver hallmarking now live under IS 2112:2025, jewellers selling silver should prepare for eventual mandatory compliance.

The Opportunity

India's jewellery market is one of the largest in the world, with gold consumption of 700+ tonnes annually. The formalisation driven by mandatory hallmarking has raised the bar for entry but also increased consumer confidence in registered, hallmark-compliant jewellers. For new entrants who invest in compliance and transparency, the market offers significant opportunity.