GST and scrap metal: code of compliance

The scrap metal industry code of compliance (the code of compliance) makes it easier for scrap metal dealers to account for goods and services tax (GST) when buying and selling scrap metal. It primarily focuses on scrap metal buyers, but is also relevant to scrap metal sellers.

Both scrap metal buyers and sellers are required to report all their sales and other sources of income.

The code of compliance provides instructions for buyers of scrap metal on:

• when an Australian business number (ABN) must be quoted by the seller
• when to withhold 47% (from 1 July 2017) from a payment
• records to keep when an ABN is quoted or required to be quoted
• records to keep when an ABN is not required to be quoted.

The code of compliance covers both statutory and voluntary measures, such as proof-of-identity procedures. By following the code, GST-registered scrap metal buyers ensure they are claiming the correct GST credit entitlement.

The details of the code are explained in:

• The importance of an ABN
• The no-ABN withholding rule
• Statement by a supplier
• Recipient-created tax invoices
• Record keeping and claiming GST credits
• Applying the code of compliance.

There is also a Flow chart to assist with applying the code of compliance.