Bullion Imports Get Costlier: IGST Exemption for Banks and Nominated Agencies Withdrawn from 1 November 2026

Importers of precious metals face a direct working-capital change from the start of November. Notification No. 34/2026-Customs, dated 27 October 2026, amends the main customs exemption notification (Notification No. 45/2025-Customs) to withdraw the IGST exemption on imports of gold, silver and platinum by banks and nominated agencies, with effect from 1 November 2026. From that date, these bullion imports attract 3% IGST on top of basic customs duty and the Agriculture Infrastructure and Development Cess (AIDC). The same notification also tidies up two defence-related exemption entries.

For the gems and jewellery trade — one of India's largest export sectors — this changes the landed cost and cash cycle of imported raw material, even though the tax is ultimately creditable.

What Happened

The notification makes two sets of changes to Notification 45/2025-Customs, effective 1 November 2026:

Bullion (the main change).

• S. No. 198 of Table I is omitted. This entry had exempted from IGST the import of gold or silver by banks (covered by List 13), gold by banks (List 14), and gold, silver or platinum by specified entities (List 15).
• Lists 13, 14 and 15 are omitted as a consequence.
• The practical effect: banks and nominated agencies importing gold, silver or platinum now pay 3% IGST in addition to basic customs duty and AIDC, on bills of entry (including ex-bond bills) filed on or after 1 November 2026.

Defence exemptions (rationalised in Table II).

• S. No. 36 is widened at the heading level from "8906 90" to "8906," so the entry now also covers warships under 8906 10 00; the existing conditions and the 1 July 2029 sunset are unchanged.
• S. No. 60 now expressly includes "missiles" and drops an open-ended "etc.," with the other exclusions, conditions and sunset unchanged.

Why / Background

Until now, banks and nominated agencies — the main authorised channels for importing bullion into India — enjoyed an IGST exemption on these imports, a relief that eased the upfront tax on large precious-metal consignments. A state-centre panel had recommended ending that relief and applying the standard 3% IGST rate that already applies to gold and silver more generally. Notification 34/2026-Customs gives that recommendation legal effect. Lists 13 and 14 had, in any case, already lapsed on 31 March 2026, so the practical bite falls mainly on the entities covered by List 15.

Who's Affected

• Banks and nominated agencies importing gold, silver or platinum.
• Gems and jewellery manufacturers and exporters who source bullion through these channels — their input cost timing changes.
• Bullion dealers and refiners relying on bank/agency import routes.
• Customs house agents (CHAs) filing bills of entry for precious-metal consignments, who must apply the revised duty structure from 1 November.

What Importers and CHAs Should Do Now

• Reprice landed cost for bullion imports from 1 November 2026 to include 3% IGST on top of BCD and AIDC.
• Plan working capital: the IGST is an upfront cash outflow even though it is creditable as input tax credit; model the financing cost of the lag between payment and credit utilisation.
• Check bills of entry timing: the change applies to bills of entry, including ex-bond bills, filed on or after 1 November 2026 — review any warehoused stock and clearance scheduling.
• Confirm your import channel's status (bank / nominated agency) and update internal costing templates and customer quotes accordingly.
• Defence suppliers: note the widened warship (S. No. 36) and missile (S. No. 60) entries if you deal in those items.

The Bigger Picture

The withdrawal is part of a broader rationalisation of precious-metal taxation and sits alongside the late-October 2026 GST reform package. The headline cost increase is real at the point of import, but because the 3% IGST can be taken as input tax credit, the lasting effect for most of the organised trade is on working-capital timing rather than on final tax cost. Smaller players and those with slower credit utilisation will feel it most. The domestic GST exemption on supply of gold to jewellery exporters under existing notifications is not affected by this change.

Frequently Asked Questions

What exactly changes on 1 November 2026? Banks and nominated agencies importing gold, silver or platinum lose the IGST exemption and pay 3% IGST on top of basic customs duty and AIDC, on bills of entry filed on or after that date.

Is the 3% IGST a permanent added cost? It is creditable as input tax credit for registered importers, so for most of the organised trade the real impact is on upfront cash flow and financing, not on the ultimate tax burden.

Does this affect jewellery exporters buying gold domestically? The change targets imports by banks and nominated agencies. The separate GST exemption on domestic supply of gold to jewellery exporters under existing notifications is not affected.

What are the defence changes about? The notification rationalises two defence exemption entries — widening one to cover certain warships and adding missiles to another — with existing conditions and the 2029 sunset intact.

Conclusion

Notification 34/2026-Customs ends a long-standing IGST relief for bullion imports by banks and nominated agencies. The tax is creditable, so this is primarily a cash-flow and costing change rather than a permanent cost — but for the gems and jewellery supply chain, getting the landed-cost math and financing right before 1 November matters.

This article summarises Notification No. 34/2026-Customs dated 27 October 2026 (amending Notification No. 45/2025-Customs) for general guidance based on available reports. Verify the exact entries, rates and effective date against the official gazette notification before acting. Source: Central Board of Indirect Taxes and Customs (cbic.gov.in).