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Edited version of private advice
Authorisation Number: 1051242779105
Date of advice: 30 June 2017
Ruling
Subject: Goods and services tax (GST) and the importation of bullion coins
Question
Is GST payable on your importation of bullion coins into Australia?
Answer
No. Your importation of the bullion coins is a non-taxable importation under paragraph (b) of section 13-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) and you therefore will not be liable to pay GST on the importation of these bullion coins.
Relevant facts and circumstances
You are an Australian entity which is registered for GST. You recently imported the bullion coins into Australia.
The bullion coins are of 99.9% fineness.
The bullion coins are in a tradeable form on the bullion market.
The price of the bullion coins is determined by the spot price of the metal.
The bullion coins are neither proof nor numismatic coins.
You are the owner an importer of the bullion coins according to the Import Declaration.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999, section 13-5
A New Tax System (Goods and Services Tax) Act 1999, section 13-10
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
Reasons for decisions
Taxable importation
Section 13-5 of the GST Act provides that an entity makes a taxable importation if:
- goods are imported goods; and
- the entity enters the goods for home consumption within the meaning of the Customs Act.
However, an importation is not a taxable importation to the extent that it is a non-taxable importation.
Goods and Services Tax Ruling GSTR 2003/15 importation of goods into Australia provides guidance on taxable and non-taxable importations under Division 13 of the GST Act.
Paragraphs 30 and 31 of GSTR 2003/15 explain when imported goods are entered for home consumption within the meaning of the Customs Act and state:
29. Imported goods are entered for home consumption, within the meaning of the Customs Act, by an 'owner' as defined in that Act, entering imported goods for home consumption. The imported goods are entered by lodging an import entry in the name of the 'owner'.
31. If you, as 'owner' lodge an import entry in your name, you enter imported goods for home consumption within the meaning of the Customs Act and you are liable to pay GST on that importation if the importation is a taxable importation.
From the information provided, paragraphs 13-5(a) and 13-5(b) of the GST Act are met as you are importing the bullion coins for home consumption within the meaning of the Customs Act since you are the owner of these coins in the Import Declaration.
However, the importation of the bullion coins is not a taxable importation to the extent that it is a non-taxable importation.
Non-taxable importation
Under subsection 13-10 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 need to determine whether the supply the bullion coins which you imported into Australia would be GST-free and/or input taxed.
Is the supply of the bullion coins when made in Australia input taxed and/or GST-free?
Section 38-385 of the GST Act
A supply of precious metals is GST-free under section 38-385 of the GST Act if:
- it is the first supply of that precious metal after its refining by, or on behalf of, the supplier; and
- the entity that refined the precious metals is a refiner of precious metal; and
- the recipient of the supply is a dealer in precious metals.
You have advised that you are not a dealer in precious metals. Section 38-385 of the GST Act is therefore not applicable to you.
Section 40-100 of the GST Act
A supply of precious metal is input taxed under section 40-100 of the GST Act.
The term 'precious metal' is defined in section 195-1 of the GST Act:
'precious metal' means:
- gold (in an investment form) of at least 99.5% fineness; or
- silver (in an investment form) of at least 99.9% fineness; or
- platinum (in an investment form) of at least 99% fineness; or
- any other substance (in an investment form) specified in the regulations of a particular fineness specified in the regulations.
Goods and Services Tax Ruling GSTR 2003/10 considers what is 'precious metal' for the purposes of GSTpurposes. At paragraph 9 of GSTR 2003/10 it states that no regulations have been made to specify any other substance. Furthermore, paragraph 10 of GSTR 2003/10 states that to be precious metal, a thing must be the metal gold, silver, or platinum of specified fineness, or a substance listed in the regulations. The gold, silver, platinum or other substance must also be in an investment form.
Metal gold/silver/platinum
To be metal, the item must have the character of the metal rather than the character of a thing made from the metal.
A factor that can point to whether something has lost its character as the metal gold is whether it is traded at a price that is determined by reference to the prevailing spot price for the metal. If something is not usually traded at a price determined by reference to the prevailing spot price of its metal content it is not being traded for its metal value only. For example, proof coins are traded at a price that reflects the quality of the finish over and above what is necessary to trade the metal value.
From the facts given, the bullion coins which you have imported into Australia are made of the metal such as gold and silver. The price is determined solely on their metal content and is derived from the spot price of the metal. Therefore, the bullion coins which you have imported into Australia have the character of the metal.
Investment form
What is 'in an investment form' is not defined in the GST Act, it will therefore takes it ordinary meaning. The expression in an investment form is covered under paragraphs 14 to 28 of GSTR 2003/10.
A summary of what is in an investment form is stated at paragraph 29 of GSTR 2003/10 which states:
29. To summarise the above, for gold, silver or platinum to be in an 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 must be a bar, wafer or coin;
- bears a mark or 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.
The bullion coins which you have imported into Australia are 'in an investment form' because:
- they are in tradeable form - the bullion coins which you have imported into Australia are coins (physical form) in which are capable of being traded on the international bullion market for the metal;
- they bear the accepted mark or characteristic - the bullion coins which you have imported into Australia are accepted in the market as identifying the fineness and quality of the metal;
- the price determined by the spot price - the bullion coins which you have imported into Australia are traded by reference to the spot price at the time they are traded.
Therefore, the bullion coins which you have imported into Australia are considered to be in the investment form. However, the definition of 'precious metal' requires that the gold and silver in investment form must be of a specified fineness.
Specified fineness
The definition of 'precious metal' requires that the metal (in an investment form) be of at least:
- gold (in an investment form) of at least 99.5% fineness; or
- silver (in an investment form) of at least 99.9% fineness; or
- platinum (in an investment form) of at least 99% fineness.
Based on the information provided, the bullion coins which you have imported into Australia have 99.9% fineness.
Accordingly, the bullion coins which you have imported into Australia satisfies definition of 'precious metals' and are previous metal as defined in the GST Act.
Section 40-100 of the GST Act contains no further requirements apart from the supply being a supply of precious metal. Accordingly, the supply of the bullion coins which you have imported into Australia is an input taxed supply under section 40-100 of the GST Act as these bullion coins are precious metals as defined in the GST Act.
Summary
Your importation of the bullion coins is a non-taxable importation under paragraph (b) of section 13-10 of the GST Act and you therefore will not be liable to pay GST on the importation of these bullion coins.
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