The A New Tax System (Goods and Services Tax) Act 1999 (GST Act) as it relates to precious metals has been amended with effect from 1 April 2017.
From 1 April 2017, a mandatory reverse charge applies on business-to-business transactions of valuable metals. This applies to sales between GST-registered suppliers and GST-registered purchasers to all taxable supplies of gold, silver or platinum.
A reverse charge transaction makes the purchaser responsible for remitting GST, rather than the supplier. It makes it easier and faster for businesses in the valuable metal industry to meet their GST and reporting obligations.
To support introduction of the new law, interim arrangements applied from 1 January 2017 to 31 March 2017. These arrangements allowed sellers and purchasers to enter into a voluntary reverse charge (VRC) arrangement. During this time, GST-registered businesses (sellers and purchasers) that entered into a VRC arrangement had to submit a worksheet to report and reconcile these transactions, in addition to lodging their business activity statement (BAS).
The reverse charge worksheet does not apply for tax periods after 1 April 2017.
Note: The reverse charge is not applicable when you are buying and selling to customers who are not carrying on a business (individual – non-business entities). In these situations, the normal GST rules apply.
See also:
- A New Tax System (Goods and Services Tax) (Incidental Valuable Metal Goods) Determination 2017 (No. 1)External Link – Legislation and supporting material
- VM 2018/1 Goods and Services Tax: Valuable Metals Market Value Determination 2018 – This legislative instrument sets out the method to calculate the market value of valuable metal to work out whether the taxable supply exceeds the valuable metal threshold.
- How we can help