Gold, Silver Imports To Attract 3% IGST As Government Ends Bank Tax Relief; What It Means For Buyers

The government has ended a tax benefit available to banks on imports of gold, silver and platinum, bringing such shipments under a 3% Integrated Goods and Services Tax (IGST) as it moves to align taxation across different precious-metal import routes.

The change, however, is not a new tax being imposed from October. Banks have effectively been paying the 3% IGST since April 1, 2026, after the government did not extend the earlier exemption beyond March 31, Revenue Secretary Arvind Shrivastava said. The government informed the GST Council about the change on Thursday.

Gold, silver and platinum imports generally attract 3% IGST, but specified banks had earlier received an exemption. The withdrawal means bullion imported through banks will face the same tax treatment as other import channels.

For consumers, the change does not mean gold or silver jewellery will automatically become 3% more expensive. Banks and eligible agencies can claim input tax credit on IGST paid on imports, while domestic bullion prices continue to be influenced by international prices, the rupee, import duties and other costs.

Why Government Ended Gold And Silver Import Tax Relief

The government said the change was aimed at ensuring parity in taxes imposed on gold and other precious metals imported through different routes.

The exemption dates back to 2017, when bullion trade was more tightly regulated and banks and nominated agencies played a larger role in facilitating precious-metal imports.

The bullion market has since evolved, including through the development of the India International Bullion Exchange, where imports are already subject to applicable duty and tax.

The government did not extend the IGST exemption for banks beyond March 31, resulting in the 3% tax becoming applicable from April 1.

The move also comes as precious-metal imports remain under scrutiny because of their impact on India's foreign-exchange outgo. Gold imports during April-August FY27 increased 3.38% to $17.47 billion, while silver imports declined 8.81% to $1.74 billion.

Will Gold And Silver Become More Expensive?

The withdrawal increases the tax payable at the import stage for bullion brought in through banks that previously benefited from the exemption, but it does not translate directly into a 3% increase in retail gold or silver prices.

The GST Fitment Committee had noted that banks and nominated agencies paying IGST would be eligible to claim input tax credit and use that credit, limiting the extent to which the levy becomes an additional final tax cost.

Gold and silver prices in India are also driven by several other factors, including international bullion prices, movements in the rupee against the dollar, customs duties and domestic demand.

The immediate change is therefore primarily in the tax treatment of bullion imports rather than a new 3% levy directly imposed on consumers buying gold or silver.

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