Why Did Madras High Court Rule Goddess Lakshmi Embossed Gold Coins Will Attract A Higher 4% Tax? https://lawbeat.in/news-updates/why-did-madras-high-court-rule-goddess-lakshmi-embossed-gold-coins-will-attract-a-higher-4-tax-1610563 [10/07, 07:36] sekarreporter1: Home > News updates > Why Did Madras High Court… Why Did Madras High Court Rule Goddess Lakshmi Embossed Gold Coins Will Attract A Higher 4% Tax?

[10/07, 07:36] sekarreporter1: Why Did Madras High Court Rule Goddess Lakshmi Embossed Gold Coins Will Attract A Higher 4% Tax? https://lawbeat.in/news-updates/why-did-madras-high-court-rule-goddess-lakshmi-embossed-gold-coins-will-attract-a-higher-4-tax-1610563
[10/07, 07:36] sekarreporter1: Home > News updates > Why Did Madras High Court…
Why Did Madras High Court Rule Goddess Lakshmi Embossed Gold Coins Will Attract A Higher 4% Tax?
The Madras HC held that gold coins engraved with Goddess Lakshmi’s image lost their character as bullion upon manufacture and upheld their classification as commercial articles taxable at 4% under the TNGST Act
By : Lawbeat News Desk
By : Sukriti Mishra
Update: 2026-07-09 07:36 GMT
The Madras High Court ruled that gold coins bearing the image of Goddess Lakshmi are commercial articles and not bullion, making them liable to a 4% tax under the TNGST Act

Madras High Court held that Goddess Lakshmi gold coins cannot be treated as bullion and upheld a 4% tax under the Tamil Nadu General Sales Tax Act.
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The Madras High Court has ruled that gold coins engraved with the image of Goddess Lakshmi cannot be classified as “bullion” and are therefore subject to a higher 4% tax rate as distinct commercial articles under the Tamil Nadu General Sales Tax (TNGST) Act, 1959, rather than the 1% concessional rate applicable to unwrought gold.

A Division Bench comprising Justice G. Jayachandran and Justice N. Mala
allowed an appeal filed by the Commercial Taxes Department of the State of Tamil Nadu against M/S HDFC Bank Ltd, setting aside a prior order of the Sales Tax Appellate Tribunal (STAT).
What was the core Dispute? ‘Bullion’ vs. ‘Finished Article’
The main issue before the High Court was whether gold coins imported from Switzerland and sold by HDFC Bank, which featured an embossed picture of Goddess Lakshmi, should be treated as “bullion in uncoined form” or as “jewellery/articles of gold”.
Under the TNGST framework, bullion is taxed at a concessional rate of 1%, whereas articles of gold are subject to a higher commercial tax rate of 4%.
Previously, the Sales Tax Appellate Tribunal had ruled in Favor of the bank. Relying on judgments from the Kerala High Court, the Tribunal held that engraving a picture on a gold coin does not strip it of its character as bullion unless it is fitted with a hook or otherwise and modified to be used as an ornament.
What did the High Court observe?
To determine how a piece of gold metal should be taxed, the High Court relied heavily on the Supreme Court’s ruling in Deputy Commissioner of Sales Tax (Law) Vs. M/s.G.S.Pai & Co.
The Apex Court had established that in common and commercial parlance, ‘bullion’ refers strictly to raw gold or silver in the mass, such as unwrought ingots or bars.
The Supreme Court has clarified that once gold is converted into manufactured or finished products, including coins stamped with a government seal or a specific denomination, it can no longer be classified as raw bullion.
Overturning the Tribunal’s findings, the Division Bench applied the Supreme Court’s rationale to the Goddess Lakshmi coins, observing that a clear transformation occurs during their manufacture.
The High Court noted that when a gold bar or ingot is manufactured into a coin, it takes on a different shape and specific markings, thereby losing its character as raw bullion.
The division bench opined that engraving the picture of Goddess Lakshmi and stamping the coin’s weight constitute a specific value addition that changes the metal’s commercial character.
“these finished metal items cannot be treated on par with ingots or into any unwrought body, of any degree of fineness. In common trade practice, gold coins with engraved pictures are not sold for a price par with bullion, but with a value addition that includes making charges and wastage” Court noted.
The division bench also considered the HDFC Bank’s stance that it did not sell these gold coins at par with bullion rates.
“for a part of the turnover, the respondent bank itself realized that the sale of these gold coins is taxable under the category of gold jewellery/articles and had collected the higher rate of tax (i.e.) 4%” the Court highlighted.
Therefore, holding that finished commercial metal items cannot be treated on par with uncoined ingots, the Bench held: “We uphold the findings of the Appellate Authority, which has observed that while bars and ingots are bullion, manufactured items and articles are distinct commercial products and cannot be classified as bullion.”
The High Court subsequently allowed the State’s tax case appeal and set aside the Tribunal’s order. The original assessment order passed by the Appellate Authority was restored, confirming the higher tax liability against the bank.
Case Title: The State of Tamil Nadu Joint Commissioner CT, Chennai v M/s HDFC Bank Ltd
Bench: Justice G. Jayachandran and Justice N. Mala
Order Date: June 23, 2026
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