Stories
Centre may withdraw IGST exemption on gold imports, prices likely to be affected
- •The GST Council may consider a proposal to withdraw the currently applicable IGST exemption on the import of gold, silver, and platinum by banks and government-nominated agencies.
- •The tax exemption was initially granted in 2017 to ease trade when the GST was introduced, but its removal would bring all bullion exchanges and nominated agencies under the same taxation level.
- •High gold imports have long been a concern for the government as they drain foreign exchange reserves and put pressure on the Indian rupee.
- •India is the world's second-largest consumer of gold, driven primarily by massive demand from the domestic jewelry sector.
Key Questions Answered
Sources indicate the GST Council may consider withdrawing the currently applicable Integrated GST (IGST) exemption of 3% on the import of gold, silver, and platinum by banks and government-nominated agencies. This exemption was originally introduced in 2017 to ease trade.
A huge amount of foreign exchange is spent on precious metal imports, placing immense pressure on the country's foreign exchange reserves and the Indian rupee. Following China, India is the world's second-largest consumer of gold, with heavy demand primarily driven by the jewelry sector.
The GST Council, which comprises the finance ministers of both the Centre and the states, is scheduled to meet on October 7 to consider withdrawing the tax exemption granted to banks and nominated agencies.
