GST Council likely to weigh ending precious metal import tax relief for banks.

The Goods and Services Tax Council is expected to examine a proposal to end the Integrated GST relief currently granted on inbound shipments of gold, silver, and platinum handled by banks and state-designated entities. The ministerial panel, which includes the Union finance minister alongside counterparts from states across the country, is scheduled to review the matter on October 7. The move would overturn an arrangement that has been operational for several years.

Under the prevailing indirect tax structure, international shipments of gold, silver, and platinum attract a 3 per cent Integrated GST levy. However, this specific tax is waived when the consignments are brought into the country by banking institutions and government-designated agencies that appear on periodic official lists. The proposed modification aims to place bullion exchanges and these designated agencies on an equal footing regarding the taxes they face on precious metals.

This special waiver was originally introduced in 2017 to assist commercial activity when precious metal trade remained under tightly controlled canalisation channels. Inbound volumes of gold, silver, and platinum have increasingly troubled authorities because these purchases consume substantial volumes of foreign currency and consequently erode India's foreign exchange holdings. Within the domestic market, the intake of gold is primarily supported by requirements originating from the jewellery manufacturing sector.

Wider macroeconomic pressures have previously prompted authorities to adjust fiscal barriers on precious metal shipments. In May, the government raised the import tariff applied to incoming consignments of gold and silver to 15 per cent from an earlier 6 per cent mark. At the same time, the customs levy imposed on platinum shipments was adjusted upward to 15.4 per cent, elevated from its prior level of 6.4 per cent, as policymakers sought to discourage non-essential inbound trade flows.

The domestic currency has also encountered challenges linked to expanding national import expenditures following the Iran-US-Israel conflict. In light of these financial pressures, Prime Minister Narendra Modi publicly urged the nation to steer clear of buying gold. India represents the second-biggest consumer base for gold across the globe, trailing only China in overall metal demand.

Despite these containment initiatives, merchandise intake data indicates that gold shipments into India during the April-August period of 2026-27 rose by 3.38 per cent to reach a valuation of $17.47 billion. Conversely, inbound trade flows for silver contracted across the identical timeframe, dropping 8.81 per cent to register at $1.74 billion.

The planned deliberations on October 7 represent the immediate next phase for this indirect tax policy shift. If the ministerial council endorses the recommendation during the upcoming meeting, the 2017 exemption regime will formally close, eliminating the differing tax levels between bullion exchange participants and authorised channel agencies handling precious metal imports.

Key numbers

• Standard IGST on precious metal imports: 3 per cent
• Import duty on gold and silver: 15 per cent
• Import duty on platinum: 15.4 per cent
• Gold imports in April-August 2026-27: $17.47 billion
• Silver imports in April-August 2026-27: $1.74 billion

What a board might note

• CFOs in the jewellery sector may evaluate how the proposed removal of the 3 per cent IGST relief on metal imports could influence raw material procurement through banks and designated agencies.
• Treasury teams and boards can assess whether bullion exchanges present a more balanced commercial channel if the tax playing field with nominated agencies is equalised after the October 7 GST Council meeting.
• Corporate planners might track how the combined effect of the 15 per cent import duty and potential full IGST liability alters total working capital requirements across precious metal inventories.

Source: The Hindu BusinessLine Economy, 15 October 2026. This is a summary of a news report, published as general information. It is not legal, tax or investment advice.