Stories
Central Government Considers Revoking Import Tax Exemption for Banks on Gold and Silver
- •The GST Council discussed revoking the current IGST exemption for importing gold and precious metals through banks and authorized agencies to create a uniform tax regime.
- •Currently, individual traders pay a 3 percent IGST on gold imports while specified banks enjoy tax exemptions granted back in 2017.
- •Heavy imports of gold and silver from abroad severely affect India's foreign exchange reserves, prompting the government to curb unnecessary purchases.
- •Last May, import duties on gold, silver, and platinum were drastically increased from 6 percent to 15 percent as part of strict control measures.
- •Despite stringent regulations and economic pressures, India's gold imports increased by 3.38 percent to reach $17.47 billion during the April-August period.
Key Questions Answered
The central government is considering revoking the current Integrated GST (IGST) exemption for the import of gold, silver, and platinum carried out through banks and government-authorized nominated agencies. If revoked, both banks and regular bullion traders will be brought under a uniform tax regime to create transparency and consistency in the tax system.
The IGST exemption was initially granted when the GST law was implemented in 2017 to facilitate ease of doing business and support trade operations that were tightly canalised at the time.
To curb non-essential purchases and control heavy gold imports, the central government drastically increased the import duty on gold, silver, and platinum from 6 percent to 15 percent last May, while the duty on platinum was raised from 6.4 percent to 15.4 percent.
