GST Council set to end tax break for banks on precious-metal imports
The GST Council will discuss revoking the 3% IGST exemption that banks and nominated agencies have enjoyed on gold, silver and platinum imports since 2017.
Imports of gold, silver and platinum are subject to a 3% IGST, but banks and nominated agencies have been exempt from this levy since a 2017 decision aimed at easing tightly regulated trade. On October 7, the GST Council, comprising central and state finance ministers, is expected to consider removing that exemption, which would align the tax treatment of bullion exchanges with that of the exempt entities. Officials note that the exemption was originally granted to facilitate controlled market activity.
Prime Minister Narendra Modi has recently called for curbing gold purchases as the rupee faces pressure from rising import costs after the Iran-US-Israel war. Data show gold imports rose 3.38% to $17.47 billion for April-August 2026-27, while silver imports fell 8.81% to $1.74 billion. The proposed change could affect the cost structure for banks and agencies dealing in precious metals.
Why it matters
Removing the exemption could raise costs for banks importing bullion, altering market dynamics and affecting India's trade balance.
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