1011991446064 | Legal database

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Authorisation Number: 1011991446064

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Ruling

Subject: GST and importation of coinage

Question 1

Are the following coins that you have imported into Australia considered a 'precious metal' for the purposes of Subdivision 38-L and Subdivision 40-D of the A New Tax System (Goods and Services Tax Act) 1999 (GST Act)?

2011 1 oz Silver coins (One 20 coin tube)

2011 1/2 oz Platinum coin (One coin)

Answer 1

Yes.

Question 2

Is goods and services tax (GST) payable on the importation of the above mentioned coins into Australia?

Answer 2

No.

Relevant facts and circumstances

You hold an Australian Business Number but are not registered for GST.

You purchased a number of silver and platinum coins from a bullion dealer.

The bullion dealer you purchased the coins from operates as an online precious metals dealership and delivers coins to a customer's doorstep. They are an authorised distributor of bullion coins.

The bullion coins are sold in bulk to a network of authorised purchasers. The coins are then on-sold to banks, brokerage companies, coin dealers, precious metal firms and wholesalers who meet prescribed requirements.

In addition, a proof version of the coins are also produced.

The bullion coins are traded at a slight premium above the spot price of their metal content and the premium rarely changes.

The price of the bullion coins are not determined by their novelty, rarity, condition or beauty; but completely determined by the spot price of the metal.

The silver and platinum bullion coins you purchased from the dealer have been imported into Australia.

Each silver coin is stamped on the back with '1 oz fine silver', which denotes 99.99% purity.

Each platinum coin is stamped on the back with '.9995 platinum' which denotes it's metal purity.

Reasons for decision

Question 1

Silver coins.

Section 195-1 of the GST Act defines precious metals to include 'silver (in an investment form) of at least 99.9% fineness'.

The term 'in an investment form' is not defined in the GST Act and it will therefore take its ordinary meaning.

Goods and Services Tax Ruling GSTR 2003/10, Goods and Services Tax: What is 'precious metal' for the purposes of GST? (GSTR 2003/10) provides the Commissioners view on what is silver in investment form.

Paragraph 29 of GSTR 2003/10 states:

To summarise the above, for gold, silver or platinum to be in investment form for the purposes of the GST Act, it must be in a form that:

· is capable of being traded on the international bullion market, that is, it be must be a bar, wafer or coin;

· bears a mark of characteristic accepted as identifying and guaranteeing its fineness and quality; and

· is usually traded at a price that is determined by reference to the spot price of the metal it contains.

These silver coins bear marks or characteristics accepted as identifying and guaranteeing their fineness and quality.

These silver coins are traded at a price that is determined by reference to the spot price of silver - not by their novelty, rarity, condition or beauty.

Hence, these silver coins are silver in investment form.

As the silver coins have at least 99.9% fineness, these silver coins are precious metals for the purposes of the GST Act.

Platinum coins.

Section 195-1 of the GST Act defines precious metals to include 'platinum (in an investment form) of at least 99% fineness'.

These platinum coins bear marks or characteristics accepted as identifying and guaranteeing their fineness and quality.

These platinum coins are traded at a price that is determined by reference to the spot price of platinum - not by their novelty, rarity, condition or beauty.

Hence, these platinum coins are platinum in investment form.

As the platinum coins have at least 99% fineness, these platinum coins are precious metals for the purposes of the GST Act.

Question 2

In accordance with subsection 7-1(1) of the GST Act, GST is payable on taxable importations.

In accordance with section 13-15 of the GST Act, you must pay GST payable on any taxable importation that you make.

You make a taxable importation where you satisfy the requirements of subsection 13-5(1) of the GST Act, which states:

(1) You make a taxable importation if:

(a) goods are imported; and

(b) you enter the goods for home consumption (within the meaning of

the Customs Act 1901).

However, the importation is not a taxable importation to the extent that it is a *non-taxable importation.
(* Denotes a term that is defined in section 195-1 of the GST Act)

In your case, goods will be imported, that is, the coins. Hence, the requirement of paragraph 13-5(1)(a) of the GST Act will be satisfied.

You have provided a copy of the Import Declaration prepared by the custom's broker when the coins entered Australia. This confirms you have entered goods for home consumption within the meaning of the Customs Act 1901. Hence, you will satisfy the requirement of paragraph 13-5(1)(b) of the GST Act.

However, the importation will not be a taxable importation to the extent that it is a non-taxable importation.

In accordance with paragraph 13-10(b) of the GST Act, an importation is a non-taxable importation if it would have been a supply that was GST-free or input taxed if it had been a supply.

We shall now determine whether your importation of the coins would have been a GST-free or input taxed supply if it had been a supply.

GST-free

Section 38-385 of the GST Act states:

A supply of *precious metal is GST-free if:

(a) it is the first supply of that precious metal after its refining by, or on

behalf of, the supplier; and

(b) the entity that refined the precious metal is a *refiner of precious metal;

and

In your case, the importation of the coins is not the 'first supply' of the precious metal and you are not a dealer in precious metal. As the supply does not meet the requirements of paragraphs 38-385(a) or 38-385(c) of the GST Act, it is not GST-free.

Input taxed

Section 40-100 of the GST Act states that 'a supply of precious metal is input taxed'.

As we advised in question 1 above, the bullion coins you have imported are a precious metal. Therefore, if your importation of the coins had instead been supplies, these supplies would have been input taxed under section 40-100 of the GST Act.

Hence, you satisfy the requirement of paragraph 13-10(b) of the GST Act, and your importation of the coins will be a non-taxable importation.

Consequently, your importation of these items is not a taxable importation under section 13-5 of the GST Act, and GST is not payable by you on this importation.

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