Gold, Silver, Platinum Imports: Why Banks Have Lost IGST Exemption And What It Means

Banks have been paying 3 per cent Integrated Goods and Services Tax (IGST) on gold, silver and platinum imports since April 1, 2026, after the government allowed the tax exemption to expire. The move brings bank imports on par with shipments routed through bullion exchanges, including the India International Bullion Exchange (IIBX) in GIFT City, Gujarat.

Revenue Secretary Arvind Shrivastava confirmed the position on October 8, saying the government had informed the Goods and Services Tax (GST) Council about the change at its 57th meeting.

“From April 1, 2026, banks have been paying 3 per cent IGST on imports of gold and other precious metals,” Shrivastava said, according to reports by Moneycontrol and Reuters. He said the move was intended to ensure tax parity across different import routes.

The exemption, introduced for gold imports in 2017 and later extended to silver and platinum, allowed banks and nominated agencies to import these metals without paying IGST upfront. The government did not extend the relief beyond March 31, 2026.

Why The Government Ended The Exemption

Banks and nominated agencies are authorised to import precious metals into India. Eligible jewellers and other participants can also use bullion exchanges such as the IIBX in GIFT City, Gujarat.

Importers using the exchange route pay 3 per cent IGST upfront, along with applicable customs duty. Banks, however, were earlier exempt from paying IGST at the time of import.

The exemption expired on March 31, 2026, and the government did not renew it. The Directorate General of Foreign Trade issued an updated list of authorised importers on April 17, but the tax exemption was not extended.

Banks have therefore been paying 3 per cent IGST on imports since April 1. Revenue Secretary Arvind Shrivastava said the move was aimed at ensuring that differences in tax treatment did not give one import route an advantage over another.

Will Gold And Silver Become More Expensive

The 3 per cent IGST is not necessarily an additional cost for banks, as they can claim input tax credit (ITC) on the tax paid, subject to applicable rules.

However, paying the tax upfront means importers need to arrange funds before they can use the credit. This could increase their working-capital requirements and affect cash flows.

Whether this leads to higher costs for jewellers or consumers will depend on how importers manage the additional funding requirement. The tax change alone does not mean gold or silver prices will rise by 3 per cent.

What It Means For India's Bullion Trade

India relies heavily on gold imports to meet domestic demand. The change removes the tax advantage banks previously enjoyed over other authorised import routes.

Banks will now have to pay IGST upfront, just as importers using bullion exchanges do, although the tax can be recovered through input tax credit. The immediate impact is therefore on cash flow rather than necessarily on the final cost of bullion.

The GST Council did not announce any tax rate changes at its October 8 meeting. It approved measures to simplify compliance and increase automation, and decided to consider rate changes at a dedicated meeting once a year.