The GST Council will consider on October 7 whether to withdraw a 2017 exemption that lets banks and nominated agencies import gold, silver and platinum without paying 3% IGST. The change would tax them the same way as bullion exchanges.
At a glance
- Gold, silver and platinum imports normally attract 3% IGST, but listed banks and nominated agencies are exempt.
- India raised import duty on gold and silver to 15% from 6% in May to curb imports.
- Gold imports rose 3.38% in value to $17.47 billion in April-August, while silver imports fell 8.81%.
Background
Integrated GST (IGST) is the goods and services tax India charges on imports. Banks and nominated agencies are entities the government lists to import bullion, largely to keep metal flowing to exporters and the gems and jewellery trade. Since 2017 they have not paid IGST at the border. Tax is collected at the next stage of sale instead.
What happened
The GST Council, made up of the Union and state finance ministers, will consider withdrawing the IGST exemption on gold, silver and platinum imports by banks and nominated agencies at its October 7 meeting, sources told PTI. Imports of these metals normally attract 3% IGST.
The exemption dates from 2017, when bullion trade was tightly canalised, meaning only a few authorised importers could bring it in. If it is withdrawn, these agencies and bullion exchanges would be taxed on the same footing, the sources said.
Why it is on the table
The government wants to cut precious metal imports, which drain foreign currency and dent India's forex reserves. In May it raised import duty on gold and silver to 15% from 6%, and on platinum to 15.4% from 6.4%. Prime Minister Narendra Modi has also urged people to avoid buying gold, as the war involving Iran, the US and Israel pushed up India's import bill.
Import volumes have dropped. A senior Finance Ministry official said in June that monthly gold imports had fallen to about 25-30 tonnes from 75-100 tonnes earlier. In value terms, though, gold imports rose 3.38% to $17.47 billion in April-August, while silver imports fell 8.81% to $1.74 billion.
What it means for India
Paying 3% IGST at the border would raise the cash that nominated agencies tie up in each consignment. The exemption was created to avoid exactly that upfront burden, with tax charged later in the supply chain.
The pool of importers using it has already shrunk. Banks have not been re-notified as designated gold importers since April 1, 2026, leaving a limited number of nominated agencies. The proposal is one of several GST process reforms on the Council's agenda and will not take effect unless it is approved and notified.
Our read
Outlook: neutral. The proposal removes an exemption for some importers rather than changing the 3% IGST rate. Its main effect would be on importers' upfront costs, not on the international gold price.
What to watch
- The GST Council's decision at its October 7 meeting.
- When any withdrawal would be notified and take effect.
- Whether jewellery exporters seek a separate route to tax-free metal.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-10-24.
Detailed analysis
Timeline
- 2026-10-04: PTI reports the GST Council will consider withdrawing the IGST exemption on precious metal imports.
Government Policies
The GST Council may end the 2017 IGST exemption for banks and nominated agencies on October 7.
Trade Tariffs
Import duty on gold and silver is already 15%, up from 6% since May.
Currency Impact
The government wants to curb precious metal imports to protect the rupee and forex reserves.
What could lift prices
- Higher upfront costs for importers could raise local premiums over the international price.
- Stress on the rupee keeps the rupee price of gold elevated.
What could weigh on prices
- Tighter rules on imports are meant to reduce Indian demand for imported gold.
- Monthly gold imports have already fallen to about 25-30 tonnes from 75-100 tonnes.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | High | The change would alter how the country taxes its gold, silver and platinum imports. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Jewellery | Negative | Jewellers and exporters supplied by nominated agencies could face higher costs passed on from importers. |
| Bullion Trading | Neutral | Bullion exchanges and nominated agencies would be taxed on the same footing. |
Who gains, who loses
- Bullion exchanges: They would be taxed on the same footing as nominated agencies.
- Nominated agencies: They would have to pay 3% IGST upfront on every import.
Other ways this could play out
- If the Council approves the change, nominated agencies will pay 3% IGST at import from the date it is notified.
- If it defers the proposal, the 2017 exemption stays in place for now.
Price risks
- A further rise in import costs could widen the gap between Indian and international gold prices.
- A recovery in the rupee would ease pressure for more import curbs.
Historical comparison
- May 2026: India raised import duty on gold and silver to 15% from 6%, and on platinum to 15.4% from 6.4%.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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