Background:
Notification No. 45/2025-Customs dated 24.10.2025 (G.S.R. 781(E)), effective from 01.11.2025, is the consolidated customs exemption notification issued under Section 25(1) of the Customs Act, 1962 read with Section 3(12) of the Customs Tariff Act, 1975, which superseded 31 earlier exemption notifications, including Notification No. 50/2017-Customs dated 30.06.2017 (the general effective-rate notification) and Notification No. 19/2019-Customs dated 06.07.2019 (exemption to specified defence equipment). The notification prescribes, in three Tables, the effective rate of basic customs duty (column (4)), the rate of integrated tax under Section 3(7) of the Customs Tariff Act (column (5)) and, in Table III, the rate of compensation cess, in respect of the goods described in each entry, subject to the conditions specified in the Annexure to each Table. Table I contains the general entries, Table II the entries relating to Government, defence and similar imports, and Table III the entries also carrying compensation cess exemption. It was last amended vide Notification No. 31/2026-Customs dated 23.09.2026.
Gold, silver and platinum imported by banks and nominated agencies: Import of gold, silver and platinum into India is a restricted activity, permitted only through designated channels, namely banks authorised by the RBI and agencies nominated by the DGFT (Appendix 4B of the Handbook of Procedures), qualified jewellers through the India International Bullion Exchange (IIBX), and India-UAE CEPA tariff rate quota holders through IIBX. Since July 2017, the import of gold and silver by such banks and nominated agencies was exempt from IGST (while basic customs duty and AIDC remained payable), the exemption being carried in S. No. 359A of Notification No. 50/2017-Customs read with List 34. On consolidation, this exemption was carried into S. No. 198 of Table I of Notification No. 45/2025-Customs, which read: “71 – Import of – (a) Gold or Silver or both by banks as per List 13 appended to TABLE I; (b) Gold by banks as per List 14 appended to TABLE I; (c) Gold/Silver/Platinum by entities as per List 15 appended to TABLE I”, with integrated tax at Nil. List 13 (13 banks authorised to import gold and silver) and List 14 (two banks authorised to import gold only) were expressed to be valid only up to 31.03.2026, in line with the RBI/DGFT authorisation cycle, whereas List 15 (The Handicraft and Handlooms Exports Corporation of India Ltd., MSTC Ltd. and Diamond India Limited) carried no sunset date. The same lists were used, by cross-reference, in the definition of “Nominated Agency” for the GST exemption on domestic supply of precious metals to jewellery exporters under Notification No. 26/2018-Central Tax (Rate).
When the DGFT notified the fresh list of authorised banks for the period 01.04.2026 to 31.03.2029 vide Public Notice No. 04/2026-27 dated 17.04.2026, Lists 13 and 14 of the customs notification were not renewed, so that the IGST exemption effectively ceased to be available to banks from 01.04.2026, while it continued to operate for the three agencies in List 15. The Fitment Committee, noting this mismatch and the need for parity in the tax treatment of precious metals imported through different channels (imports through IIBX and by other importers already suffer IGST at 3%), recommended that the IGST exemption for banks and nominated agencies be discontinued altogether and that, consequentially, the definition of “Nominated Agency” in the GST exemption notifications be re-linked to Appendix 4B of the Handbook of Procedures. The Revenue Secretary stated on 08.10.2026, the day of the 57th GST Council meeting, that imports of gold, silver and platinum by banks and nominated agencies attract IGST at 3% with effect from 01.04.2026 and that the lists would not be extended. The withdrawal also reflects the Government’s concern over the rising outflow of foreign exchange on account of precious metal imports, in furtherance of which the customs duty on gold and silver had been raised with effect from 13.05.2026.
Defence exemption entries: Notification No. 19/2019-Customs, which exempted specified defence equipment imported by the Ministry of Defence or the defence forces from customs duty and IGST, was substantially expanded vide Notification No. 37/2025-Customs dated 17.09.2025 (S. Nos. 24 to 41, effective 22.09.2025) on the recommendations of the 56th GST Council, which had recommended reduction of IGST from 18% to Nil on such goods. These entries were carried into S. Nos. 21 to 61 of Table II of Notification No. 45/2025-Customs, each subject to Condition No. 17 (import by the Ministry of Defence, the defence forces, defence or other public sector units or any other entity for the defence forces, with a certificate from an officer not below the rank of Joint Secretary in the Ministry of Defence) and each with a sunset clause that the entry shall not have effect on or after 01.07.2029. In the process of consolidation, two drafting discrepancies crept in: (i) S. No. 36, covering “Other vessels, including warships and lifeboats other than rowing boats required under the category of underwater vehicle/platforms for special operations”, was classified in column (2) under sub-heading “8906 90” (other vessels), although warships fall under tariff item 8906 10 00, so that the heading in column (2) did not cover the goods described in column (3); and (ii) S. No. 60, covering parts, sub-assemblies, spares, accessories, tools, testing equipment and literature for defence goods, described the goods as “artillery weapons, rifles, aircrafts, etc.”, dropping the reference to “missiles” which was present in the corresponding S. No. 40 of Notification No. 19/2019-Customs (“artillery weapons, rifles, aircrafts, missiles, etc.”), and leaving the scope of the entry to be inferred from the word “etc.”.
What the Notification provides:
Now, the CBIC vide Notification No. 34/2026-Customs dated 27.10.2026 (G.S.R. 933(E), issued under Section 25(1) of the Customs Act, 1962 read with Section 3(12) of the Customs Tariff Act, 1975, has made the following amendments in Notification No. 45/2025-Customs:
- Table I, S. No. 198 omitted: The entry exempting import of gold or silver by banks (List 13), gold by banks (List 14) and gold, silver or platinum by the entities in List 15 from integrated tax has been omitted. Consequently, import of gold, silver and platinum by banks and nominated agencies will attract integrated tax under Section 3(7) of the Customs Tariff Act at the rate applicable to the goods (3% for gold, silver and platinum under Schedule IV of Notification No. 9/2025-Integrated Tax (Rate)), in addition to the basic customs duty and Agriculture Infrastructure and Development Cess.
- Lists 13, 14 and 15 appended to Table I omitted: The three lists of banks and nominated agencies referred to in S. No. 198 have been omitted, since they no longer serve any purpose in the customs notification. The identification of nominated agencies for the purposes of the Foreign Trade Policy and the GST exemption on domestic supply to jewellery exporters will henceforth be by reference to Appendix 4B of the Handbook of Procedures (see Notification No. 05/2026-Central Tax (Rate) dated 27.10.2026, which substitutes the definition of “Nominated Agency” in Notification No. 26/2018-Central Tax (Rate) accordingly).
- Table II, S. No. 36 – heading corrected: Against S. No. 36, the entry in column (2) has been substituted with “8906”, so that the exemption for “Other vessels, including warships and lifeboats other than rowing boats required under the category of underwater vehicle/platforms for special operations” now covers the whole of heading 8906, including warships of tariff item 8906 10 00, and not merely sub-heading 8906 90.
- Table II, S. No. 60 – description substituted: The description of goods has been substituted to read: “Parts, sub-assemblies, spares, accessories, tools, testing equipment, literature for goods like artillery weapons, rifles, aircrafts, and missiles, except for 12.7mm SRCG, 155mm/45 Cal. Dhanush, L-70 Gun, 84mm RL Mk-III, AK-630 Naval Guns, Light Machine Gun, MAG Gun: Provided that nothing contained in this S. No. shall have effect on or after the 1st July, 2029”. The reference to “missiles” has been restored and the open-ended “etc.” has been dropped, so that the entry now specifically covers parts, spares, accessories, tools, testing equipment and literature for artillery weapons, rifles, aircraft and missiles. The exclusions for the indigenously manufactured 12.7mm SRCG, 155mm/45 Cal. Dhanush, L-70 Gun, 84mm RL Mk-III, AK-630 Naval Guns, Light Machine Gun and MAG Gun, Condition No. 17 and the sunset date of 01.07.2029 remain unchanged.
| Entry of Notification No. 45/2025-Customs | Position up to 31.10.2026 | Position w.e.f. 01.11.2026 |
| Table I, S. No. 198 (Chapter 71) | Import of gold or silver by banks in List 13, gold by banks in List 14 and gold/silver/platinum by entities in List 15 – integrated tax Nil (Lists 13 and 14 valid up to 31.03.2026) | Entry and Lists 13, 14 and 15 omitted; IGST at 3% payable on such imports, with basic customs duty and AIDC as applicable |
| Table II, S. No. 36 (vessels for special operations) | Column (2): “8906 90”; BCD Nil, IGST Nil, Condition 17, sunset 01.07.2029 | Column (2): “8906”; other particulars unchanged |
| Table II, S. No. 60 (parts, spares, etc. of defence goods, any Chapter) | “…for goods like artillery weapons, rifles, aircrafts, etc. except for …”; BCD Nil, IGST Nil, Condition 17, sunset 01.07.2029 | “…for goods like artillery weapons, rifles, aircrafts, and missiles, except for …”; other particulars unchanged |
Effective date:
The Notification comes into force on 1st November, 2026, the same date on which the GST rate notifications giving effect to the 57th GST Council’s recommendations take effect. Bills of entry for gold, silver and platinum filed by banks and nominated agencies on or after 01.11.2026 (and, for goods imported earlier, ex-bond bills of entry filed on or after that date, in terms of Section 15 of the Customs Act) will attract integrated tax. For banks in Lists 13 and 14, the exemption had in any event lapsed on 31.03.2026, so the practical change is the formal withdrawal and the cessation of the exemption for the three agencies in List 15.
Key takeaways for taxpayers and the industry:
- Banks and nominated agencies: IGST at 3% becomes payable at the time of import of gold, silver and platinum. The tax so paid is available as input tax credit under Section 16 of the CGST Act, since the imported metal is supplied onward to jewellers and bullion dealers on payment of GST at 3%, so the measure is a working capital cost rather than a tax cost. Pricing of bullion sold on consignment or outright basis, and the credit lines extended to jewellers, should be reworked for the upfront IGST outgo.
- Jewellery exporters: Domestic supply of gold, silver and platinum by nominated agencies to exporters of jewellery under the “Export against Supply by Nominated Agency” scheme continues to be exempt from GST under Notification No. 26/2018-Central Tax (Rate), the definition of “Nominated Agency” having been simultaneously re-linked to Appendix 4B of the Handbook of Procedures by Notification No. 05/2026-Central Tax (Rate). The exemption on the domestic leg is unaffected by the withdrawal of the IGST exemption on the import leg; nominated agencies will, however, carry IGST credit on imports against exempt domestic supplies to exporters, and should examine refund of unutilised credit or reversal under Section 17(2), as applicable.
- Parity with other channels: With the omission of S. No. 198, imports of precious metals by banks and nominated agencies, by qualified jewellers through IIBX and by other eligible importers are placed on the same IGST footing, removing the arbitrage between channels.
- Defence importers and vendors: The correction of S. No. 36 removes a classification doubt for warships and other vessels imported under the special-operations category, and the substituted S. No. 60 provides certainty that parts, spares, accessories, tools, testing equipment and literature for missiles are covered, while the indigenously manufactured guns listed in the exclusion remain outside. Importers must continue to produce the certificate prescribed in Condition No. 17 from an officer not below the rank of Joint Secretary in the Ministry of Defence at the time of import, and should note that all the defence entries in Table II cease to have effect from 01.07.2029.
- Record-keeping: Entities that were listed in Lists 13 to 15 should preserve the bills of entry and exemption claims for imports made up to 31.10.2026 (and, for banks, up to 31.03.2026) for future assessments, as the exemption for those periods remains valid notwithstanding the omission.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/10/N-No.-34-2026-Customs.pdf
