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Business News›News›Economy›Policy›GST exemption for banks, nominated agencies for gold, silver imports may be withdrawn

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GST exemption for banks, nominated agencies for gold, silver imports may be withdrawn
Synopsis

The GST Council may end the IGST exemption on gold, silver and platinum imported by banks and nominated agencies, sources said. The exemption, introduced in 2017 when precious-metal imports were tightly regulated, could be withdrawn as the government seeks to curb non-essential imports and manage foreign exchange outflows.

Agencies

The GST Council is likely to consider a proposal to withdraw Integrated GST (IGST) exemption on gold, silver and platinum imports by banks and nominated agencies, sources said.



Currently, imports of gold, silver, and platinum are subject to a 3 per cent IGST. However, this tax is exempt when these precious metals are imported by banks and nominated agencies, which are periodically listed by the government.



Also read: GST 2.0's next move: Council may scrap officers' arrest powers, raise prosecution bar to Rs 5 crore

Sources said that on October 7, the GST Council, comprising Centre and state finance ministers, will consider withdrawing the tax exemption given in 2017 to banks and nominated agencies.



The Goods and Services Tax (GST) exemption on such imports was given in 2017 to facilitate trade that was then tightly canalised, sources said, adding that after withdrawal, bullion exchanges and these agencies will be on the same footing in terms of taxation.




Gold, silver and precious metal imports have been a concern for the government, as they lead to an outflow of foreign currency and dent India's forex reserves. India is the world's second-largest gold consumer after China. Gold imports are mainly driven by the jewellery industry demand.

In May, the government hiked import duty on gold and silver to 15 per cent, from 6 per cent, and on platinum to 15.4 per cent, from 6.4 per cent, to curb non-essential imports.

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