The Union Budget 2026-27 has brought clarity for bullion importers and investors, as the government has decided to keep customs duty on gold and silver unchanged. Despite market expectations of a possible revision, the existing duty structure will continue for the upcoming financial year.
Current Customs Duty on Gold and Silver
As per the Budget 2026 announcements, importers will continue to pay the same customs duty rates applicable earlier:
- Gold imports:
Gold in all forms attracts a total customs duty of 6 percent, which includes:- 5 percent Basic Customs Duty (BCD)
- 1 percent Agriculture Infrastructure and Development Cess (AIDC)
- Silver imports:
- Eligible Indian residents pay 6 percent customs duty
- Other importers are taxed at 36 percent, comprising:
- 35 percent Basic Customs Duty
- 1 percent AIDC
In addition to customs duty, both gold and silver attract a uniform Goods and Services Tax (GST) of 3 percent.
Background: Duty Cut on Gold in 2024
The government had earlier reduced customs duty on gold significantly from 15 percent to 6 percent, effective July 24, 2024. This move was aimed at curbing smuggling and stabilizing domestic prices. The Budget 2026-27 maintains this reduced rate, offering continuity and predictability for the bullion market.
Clarification on Personal Use Imports
Some confusion arose after Finance Minister Nirmala Sitharaman stated that the tariff rate on all dutiable goods imported for personal use would be reduced from 20 percent to 10 percent. However, market experts have clarified that this concession does not apply to gold and silver jewellery or other precious metals.
Goods imported for personal use generally include:
- Clothing and footwear
- Personal electronics and gadgets
- Watches and accessories
- Household items
- Certain medicines in reasonable quantities
These items are usually assessed under personal effects or baggage provisions and are not intended for commercial resale.
Market Reaction to Budget 2026
According to industry experts, there was no update on import duty for bullion in Budget 2026, which weighed on market sentiment. With sharp weakness already seen in the CME market, domestic gold and silver prices reacted negatively.
- Gold prices have corrected nearly 20 percent, falling from a peak of ₹1,82,500 to around ₹1,47,800.
- Silver prices witnessed a sharper decline of about 36 percent, dropping from ₹4,20,000 to nearly ₹2,65,650.
Conclusion
By keeping customs duty on gold and silver unchanged, Budget 2026-27 provides stability to bullion import policies. While the decision disappointed some market participants expecting further relief, it reinforces policy continuity amid ongoing volatility in global and domestic precious metal markets.
Source: Adapted from MoneyControl