Jewellers quoting varying gold prices

Reena Rathod recently visited Zaveri Bazaar in south Mumbai to buy jewellery for her sister's wedding. To her surprise, she found a Rs 50-100 difference in the prices of 10 gm gold in shops located on the same lane. On checking out shops at Dadar in central Mumbai, she found the price variation even sharper.

The price of the yellow metal quoted at various jewellery shops in the city of Mumbai show a huge variance of up to Rs 100 or more in 22-carat and 23-carat gold.

Business Standard conducted a sample survey of 15 jewellers across Mumbai and their pricing of 22-carat and 23-carat gold products.

On June 2, the rates quoted in the market for 10 gm 23-carat gold (95.45 purity) ranged between Rs 6,140 and Rs 6,180. Similarly the 22-carat gold (91.6 purity) ranged between Rs 5,500 and Rs 5,750 per 10 gm. 
 

Tag differential
Area/shop name	Gold prices in city per Rs/10 gm 22 carat(91.6) 23 carat (95.45)
Prabhadevi
Chintamani Jewellers	5720	6140
Dadar
Vaman Hari Pethe	5845	6140
Anil Jewellers	5890	6200
M Pandurang Hari Vaidya & Sons	5940	6140
Rasiklal & Sons	5900	6120
Lalbaug
Vardhaman Jeweller	5780	6080
Dhanalakshmi Jewellers	5880	6080
Nutan Jewellers	5780	6080
Raju Jewellers	--	6120
Zaveri
Kewalram Ghanshyamdas Popley	5600	--
Bherumal Shamandas	5650	--
Jamnadas M. Choksi	5650	--
Tribhovandas Bhimji Zaveri	5740	--
Chandrakant Bhimji Zaveri	5700	--
Danabhai & Sons	5500	--

This is against the official rate of Rs 6,065 (.999 purity or 24 carat) per 10 gm, quoted by the bullion association, which includes the 1 per cent value added tax (VAT).

This means that the price of 23-carat gold then stood at Rs 5,790 per 10 gram, and 22 carat gold was quoting at Rs 5,555 per 10 gram on June 2, pointed out Jugraj Kantilal, Mumbai's largest bullion dealer.

This difference in the jewellery prices is not unusual. The differential between actual market quotes and official rates put out by the bullion association stems from the high premiums on manufactured jewellery.

Said veteran bullion consultant Madhusudan Daga: "The price differential, which includes the premium, exists across India. 22-carat gold is more popular and hence the premium of Rs 100-200 quoted by dealers.

This is because there is no proper system to fix the prices by the bullion associations," he said. Further, some jewellers refrain from issuing receipts on purchases to avoid the new uniform VAT regime in the state of Maharashtra.

States like Tamil Nadu and Kerala have a uniformity in their gold prices but often quote higher premiums, said Daga.

Another issue facing the pricing of gold ornament is hallmarking, where an even heavier premium of over 5 per cent on the jewellery is charged by the jewellers.

Daga, however, said that hallmarking should be made mandatory and traders should be allowed to affix their own logos as quality marks, for identification and should be punished if the jewellery falls short of standards. The government has already imposed a 2 per cent excise duty on branded jewellery.