MMTC, STC may lose gold import tax advantage as GST Council weighs 3% GST; aim to put banks, nominated agencies and exchanges on equal footing

Tue Oct 06 2026

Government entities such as MMTC and the State Trading Corporation of India (STC) could be brought within the GST framework for imports of gold and other precious metals. The proposal is intended to give different bullion-import channels similar tax treatment and reduce classification and valuation disputes that have resulted in lengthy litigation. The issue is likely to be discussed at the GST Council meeting on October 8.

Currently, banks and certain nominated agencies are required to pay 3% GST when importing precious metals. The broader proposal seeks to harmonise the treatment of bullion imported through banks, nominated agencies and exchanges.

If implemented, the proposal could end preferential treatment available to some agencies since 2017. At that time, gold, silver and platinum imports were largely routed through a limited number of banks and nominated agencies. Since then, bullion exchanges have emerged as another import channel, with duties and taxes being paid through this route.

Renisha Chainani, Chief Research Officer at Augmont, said removing the exemption would create a more level playing field among import routes. She said the 2017 exemption made sense when only a few banks and nominated agencies imported bullion, but with bullion exchanges now providing another route, the same duty and tax rules should apply to everyone.

She said the immediate effect could be lower bullion imports by banks and nominated agencies, because paying tax upfront would increase working-capital requirements and put pressure on margins. This could temporarily increase local premiums and slow the flow of bullion to jewellers.

Over time, however, more trade could shift towards exchanges, potentially making gold pricing more transparent and better organised.  The proposal could also address practical problems arising when classification codes are changed in the Budget but corresponding tariff notifications are not updated. Such mismatches have caused disputes over whether a change applies to the goods themselves or merely their classification.

Putting all bullion-import channels under the same tax treatment could reduce differences in interpretation and make bullion sourcing more transparent and efficient for jewellers.

Festive season coming: Will silver outshine gold?

Silver could become a stronger alternative to gold for Indian buyers this festive season as gold prices remain expensive despite their recent decline.

Traditionally, silver has played a secondary role to gold in India's jewellery market, but the high price of gold is encouraging consumers and investors to consider silver. Jewellers and traders are expanding their silver offerings, including jewellery, idols and furniture. The festive season begins with Navratri on October 11.

At prevailing prices, 10 grams of 24-karat gold costs around Rs 1.5 lakh, while the same amount could buy roughly 650 grams of silver. The article also notes that higher gold hallmarking charges are raising concerns about counterfeit hallmarking stamps. The industry fears that increased charges could encourage unscrupulous jewellers to use forged marks to avoid the additional cost, particularly in tier-2, tier-3 and tier-4 cities, where consumer awareness is relatively limited.

Source: https://timesofindia.indiatimes.com