India removed tax incentives for banks and government designated agencies to import gold, silver and platinum, and levied a 3% tax on related imported goods, thereby increasing the cost of the main channel of supply to one of the world's largest precious metals markets. Tax Secretary Arvind Shrivastava told reporters in New Delhi on Thursday that the government has not extended the exemption from comprehensive goods and services tax on imported precious metals through banks until after March 31 this year. This move places all gold and silver import channels on the same footing in terms of tax treatment. Shrivastava said the decision was made to “prevent taxes from becoming the reason one import channel is superior to another.” India strictly controls gold imports. Most gold enters the country through authorized banks and designated institutions, while eligible jewelers can import it through the Indian International Precious Metals Exchange. The new tax system will take up more working capital for these importers.

India removed tax incentives for banks and government designated agencies to import gold, silver and platinum, and levied a 3% tax on related imported goods, thereby increasing the cost of the main channel of supply to one of the world's largest precious metals markets. Tax Secretary Arvind Shrivastava told reporters in New Delhi on Thursday that the government has not extended the exemption from comprehensive goods and services tax on imported precious metals through banks until after March 31 this year. This move places all gold and silver import channels on the same footing in terms of tax treatment. Shrivastava said the decision was made to “prevent taxes from becoming the reason one import channel is superior to another.” India strictly controls gold imports. Most gold enters the country through authorized banks and designated institutions, while eligible jewelers can import it through the Indian International Precious Metals Exchange. The new tax system will take up more working capital for these importers.