GST exemption for banks, nominated agencies for gold, silver imports may be withdrawn

The GST Council is likely to consider a proposal to withdraw Integrated GST (IGST) exemption on gold, silver and platinum imports by banks and nominated agencies, sources said.

Currently, imports of gold, silver, and platinum are subject to a 3 per cent IGST. However, this tax is exempt when these precious metals are imported by banks and nominated agencies, which are periodically listed by the government.

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Sources said that on October 7, the GST Council, comprising Centre and state finance ministers, will consider withdrawing the tax exemption given in 2017 to banks and nominated agencies.

The Goods and Services Tax (GST) exemption on such imports was given in 2017 to facilitate trade that was then tightly canalised, sources said, adding that after withdrawal, bullion exchanges and these agencies will be on the same footing in terms of taxation.

Gold, silver and precious metal imports have been a concern for the government, as they lead to an outflow of foreign currency and dent India's forex reserves. India is the world's second-largest gold consumer after China. Gold imports are mainly driven by the jewellery industry demand.

In May, the government hiked import duty on gold and silver to 15 per cent, from 6 per cent, and on platinum to 15.4 per cent, from 6.4 per cent, to curb non-essential imports.

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Prime Minister Narendra Modi has also given a clarion call to avoid gold purchases, amid stress on the rupee following a rise in import bills after the Iran-US-Israel war.

Gold imports in April-August 2026-27 grew 3.38 per cent to USD 17.47 billion, while silver imports declined 8.81 per cent to USD 1.74 billion.