Gold, Silver and Platinum Imports: Will 3% IGST Make Precious Metals Costlier?

The Centre has not extended a special exemption from Integrated Goods and Services Tax (IGST) on imports of gold, silver and platinum by banks and authorised agencies, making these imports subject to 3% IGST from April 1, 2026. The development has raised concerns among consumers about whether gold and silver prices could increase further in the coming days.

However, the additional tax requirement does not automatically mean that retail prices will rise by 3%, as businesses may be eligible to offset the tax through input tax credit, subject to applicable rules.

What Has Changed in Precious Metal Imports?

Previously, banks and certain authorised agencies enjoyed an exemption from paying IGST on imports of gold, silver and platinum. As the exemption was not extended, a 3% IGST now applies to these imports.

According to Revenue Secretary Arvind Srivastava, the government informed the GST Council about the change on October 8. The objective is to ensure uniformity in the tax treatment of precious metal imports through different channels, preventing any particular import route from gaining an advantage due to tax differences.

Will Gold and Silver Prices Increase?

The immediate impact on retail prices remains uncertain. Although banks and importers must pay IGST at the time of import, eligible businesses may claim input tax credit to offset the tax liability under applicable GST provisions.

However, importers may need to arrange additional funds upfront to pay the tax. This could put pressure on their cash flow and increase financing costs. If these additional expenses affect the supply chain, some of the costs could eventually be passed on to jewellery retailers and consumers.

The extent of any price change will depend on several market factors.

Factors That Influence Gold Prices

Gold and silver prices in India depend on international market trends, fluctuations in the rupee against the US dollar, import duties and other applicable taxes. Transportation, financing and jewellery manufacturing costs can also influence final prices.

Therefore, the new IGST requirement alone may not determine the direction of domestic precious metal prices.

What Should Consumers Do?

Consumers planning to purchase gold or silver for weddings, festivals or investment purposes should check the latest local prices before buying. Comparing making charges across jewellery stores can also help reduce expenses.

Buyers should obtain a proper bill and verify the purity, weight, price and applicable taxes before completing their purchases.