GST Council may scrap tax exemption on gold, silver, platinum imports by banks

The GST Council is likely to consider ending the IGST exemption on gold, silver and platinum imports by banks and government-nominated agencies. The proposed change would align their tax treatment with bullion exchanges as the government seeks to curb precious metal imports.GST Council may end IGST exemption on gold, silver, platinum imports by banks and government-nominated agencies. (Representative image)The GST Council is likely to consider withdrawing the Integrated GST (IGST) exemption on imports of gold, silver and platinum by banks and government-nominated agencies, sources said.At present, imports of these precious metals attract a 3 per cent IGST. However, banks and nominated agencies are exempt from paying the tax when importing gold, silver and platinum. The exemption was introduced in 2017.According to sources, the GST Council, comprising Union and state finance ministers, is expected to take up the proposal at its October 7 meeting.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.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. 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.- EndsWith PTI inputs