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Ruling

Subject: GST and Precious Metals

Question

Does GST need to be paid on investment gold when it is brought into Australia either via post or carried in by a person?

Answer

No, GST need not be paid on investment gold when it is brought into Australia either via post or carried in by a person.

Relevant facts and circumstances

You have investment gold overseas.

You are not dealers of precious metal.

You would like to import the investment gold into Australia, either via post or carried in by a person.

The gold bars bear with the supplier's mark and the numerals 9999 identifying that they are in the form of at least 99.5% fineness gold.

The gold bars that you intend importing are from a reputable supplier and are capable of being traded on the international bullion market at a price that is determined by reference to the prevailing spot price for the metal.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999

Section 13-5

Section 40-100

Section 195-1

Reasons for decision

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:

You make a taxable importation if:

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)

As the gold will be imported in the form of bars, the requirement of paragraph 13-5(1)(a) of the GST Act is satisfied.

As you are importing these goods for home consumption within the meaning of the Customs Act 1901, the requirement of paragraph 13-5(1)(b) of the GST Act is also satisfied.

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.

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

Hence, the importation of a precious metal is a non-taxable importation. Therefore, what needs to be determined here is whether the gold bars that you import come within the definition of precious metal for the purposes of the GST Act.

'Precious metal' is defined in section 195-1 of the GST Act to mean:

(a) gold (in an investment form) of at least 99.5% fineness;

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 that the item 'must have the character of the metal rather than the character of the thing made from the metal'. The character of the metal can be established from the spot price. If it is the actual metal and not something made from the metal then it should be 'traded at a price that is determined by reference to the prevailing spot price for the metal.'

Section 195-1 of the GST Act also requires the precious metal to be in investment form. GSTR 2003/10 provides that for gold to be in an investment form for the purposes of the GST Act it must be in a form that:

In your case, the gold is from a reputable supplier in bar form, which is recognised as a physical form capable of being traded on the international market. Each gold bar bears the supplier's mark and the numerals 9999, which identify and guarantee the bar's fineness and quality as tradeable gold. The value of the gold bars is determined with reference to their spot price and they have no added value, such as jewellery or coins would.

Accordingly, the investment gold you import from overseas is a 'precious metal' for the purposes of the GST Act. Therefore, the importation of gold bars is a non-taxable importation and is thus not subject to GST.

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