Stories
GST Council May Withdraw IGST Exemption On Gold And Silver Imports
- •The GST Council is scheduled to meet on October 7 to consider withdrawing the existing IGST exemption on precious metal imports by banks and government-approved nominated agencies.
- •Currently, select banks and nominated agencies are exempt from the 3% IGST paid by regular traders, and the proposed change aims to create a level playing field in the precious metals trade.
- •India is the world's second-largest consumer of gold, and gold imports rose 3.38% to $17.47 billion between April and August of the current financial year.
- •To curb rising imports and protect forex reserves, the government previously raised import duties on gold and silver to 15% in May.
- •Prime Minister Narendra Modi has also urged citizens to avoid unnecessary gold purchases amid economic pressures and rising geopolitical tensions involving Iran, the US, and Israel.
Key Questions Answered
The GST Council is expected to consider withdrawing the existing Integrated Goods and Services Tax (IGST) exemption on precious metal imports by banks and government-approved nominated agencies during its October 7 meeting to establish a level playing field and uniform tax system.
The government raised the import duty on gold and silver from 6% to 15%, and on platinum from 6.4% to 15.4%, to curb rising precious metal imports, discourage non-essential purchases, protect foreign exchange reserves, and reduce pressure on the rupee.
Government data shows that between April and August of the 2026-27 financial year, India's gold imports rose 3.38% to reach about $17.47 billion, whereas silver imports fell 8.81% during the same period to $1.74 billion.
