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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1012769980516

Ruling

Subject: Goods and services tax (GST) and palladium bullion and diamonds.

Question 1

Is the sale of palladium in bullion form subject to GST?

Answer

Yes, provided that:

There is no GST exemption for the sale of palladium bullion.

Question 2

Is a purchaser of palladium in bullion form entitled to a Tourist Refund Scheme (TRS) refund if they leave Australia with the palladium bullion?

Answer

Yes, if:

Note that the entity claiming the TRS refund must have made a genuine purchase from another entity.

Question 3

Is the sale of loose diamonds subject to GST?

Answer

Yes, if:

There is no GST exemption for the sale of diamonds

Question 4

Is a purchaser of loose diamonds entitled to a TRS refund if they leave Australia with the diamonds?

Answer

Yes, if:

Note that the entity claiming the TRS refund must have made a genuine purchase from another entity.

Relevant facts and circumstances

You are not registered for GST.

You frequently travel to overseas and on many of these occasions you have elected to claim a GST refund under the Tourist Refund Scheme at the airport and on each occasion you have met every criteria outlined in order to be eligible to make a claim under this scheme.

You primarily take palladium in bullion form and loose diamonds out of Australia.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1)

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Act 1999 section 9-40

A New Tax System (Goods and Services Tax) Act 1999 section 38-385

A New Tax System (Goods and Services Tax) Act 1999 section 40-100

A New Tax System (Goods and Services Tax) Act 1999 section 195-1

A New Tax System (Goods and Services Tax) Act 1999 Division 168

A New Tax System (Goods and Services Tax) Regulations 1999 regulation 168

Reasons for decisions

Question 1

Summary

There is no GST exemption for the sale of palladium bullion.

Detailed reasoning

GST is payable on taxable supplies.

You make a taxable supply if you meet the requirements of section 9-5 GST Act, which states:

You make a taxable supply if:

(*Denotes a term that is defined in section 195-1 of the GST Act)

A sale meets the requirement of paragraph 9-5(a) of the GST Act because there is consideration for a supply.

A sale of precious metal as defined in section 195-1 of the GST Act is potentially GST-free under section 38-385 of the GST Act or input taxed under section 40-100 of the GST Act.

Precious metal is defined in section 195-1 of the GST Act as:

The GST regulations do not specify any substance for the purposes of paragraph (d) of the definition of precious metals.

As palladium is not gold, silver or platinum, it cannot meet the definition of precious metal in the GST Act. Therefore, a sale of palladium bullion is not exempt from GST under the precious metals exemptions (section 38-385 or section 40-100 of the GST Act). There are no other GST exemptions that apply to the sale of palladium bullion.

Where goods are sold in Australia and the purchaser exports the goods from Australia and certain other requirements are met, the sale is GST-free under section 38-185 of the GST Act. If the purchaser seeks a TRS refund, the export exemption will not apply.

Therefore, the sale of palladium bullion is subject to GST if:

Question 2

Summary

The purchase of palladium bullion is eligible for a TRS refund.

Detailed reasoning

In accordance with Division 168 of the GST Act and regulation 168 of the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations), a purchaser of palladium bullion is entitled to a TRS refund if:

Question 3

Summary

There is no GST exemption for the sale of loose diamonds.

Detailed reasoning

There are no GST exemptions for the sale of loose diamonds. Therefore, a sale of loose diamonds is subject to GST if:

Question 4

Summary

The purchase of loose diamonds is eligible for a TRS refund

Detailed reasoning

In accordance with section 168 of the GST Act and Regulation 168 of the GST Regulations, a purchaser of loose diamonds is entitled to a TRS refund if:

Customs is responsible for administering the TRS scheme.

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