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  • Reverse charge for taxable sales of gold, silver and platinum and law clarification of second hand goods

    On 31 March 2017, the Government announced that from 1 April 2017 a reverse charge of goods and services tax (GST) will apply to all business to business taxable supplies of gold, silver or platinum.

    The key aspects of the changes are:

    1. The introduction of a reverse charge for business-to-business transactions between suppliers and purchasers of gold, silver and platinum. Under the reverse charge the purchaser is responsible for remitting GST, rather than the supplier.  
      • 'Valuable metals' is a new concept introduced with the new legislation and means gold, silver and platinum.
      • Reverse Charge does not apply to transactions that qualify under the 10% valuable metal threshold test. However, the supplier and purchaser can agree to voluntarily reverse charge these supplies.
      • The reverse charge applies to transactions on the date of sale (at the time the goods are sold or purchased).
      • Both the supplier and purchaser must record the transactions to which the GST reverse charge applies in their accounting records.
    2. Amendments to the definition of ‘second-hand goods’ in the GST Act to clarify that goods containing gold, silver or platinum are not second-hand goods.  
      • Collectables and antiques or goods whose value satisfies the valuable metal threshold test may qualify as second-hand goods, even if the second-hand goods contain some valuable metal. Generally valuable metals are not second-hand goods.

    Note: The reverse charge does not apply if you are buying and selling to members of the public (individual non-business entities). The normal GST rules apply when selling to an individual and the sale price must include GST for any taxable sales. You, as the seller, must collect and remit the GST payable on the sale where the reverse charge does not apply.

    Legislation and supporting material

    The Treasury Laws Amendment (GST Integrity) Act 2017External Link received royal assent on 26 June 2017.

    Legislative Instrument Goods and Services Tax: valuable metals market value determination 2018 was registered on 8 February 2018.

    See also:

      Last modified: 21 Feb 2018QC 51622