Edited version of private ruling

Authorisation Number: 1011694453943

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Ruling

Subject: GST and importation of silver coins

Question 1

Are the silver coins that you have imported 'precious metals' under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes.

Question 2

Is GST payable on the importation of these silver coins into Australia?

Answer

No

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You purchased some silver coins from an overseas bullion dealer.

You are not a dealer in precious metal.

The silver coins are legal tender in the overseas country and are traded on the international market.

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

Each silver coin is stamped on the back with '1 OZ FINE SILVER', which denotes 99.99% purity.

You have provided a copy of the Import Declaration prepared by the customs agent when the silver coins were entered into Australia.

Reasons for decisions

Question 1

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

What is '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 'What is 'precious metal' for the purposes of GST?' provides guidance 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.

From the facts you provided, these silver coins are silver in investment form as:

· the silver coins you imported are traded on the international market.

· 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.

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

To summarise, the silver coins that you have imported are precious metals under the GST Act.

Question 2

Subsection 7-1(1) of the GST Act provides that 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:

(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 are imported, that is, the silver coins. Hence, the requirement of paragraph 13-5(1)(a) of the GST Act is satisfied.

You have provided a copy of the Import Declaration prepared by the customs agent when the silver coins were entered Australia. This confirms you have entered goods for home consumption within the meaning of the Customs Act 1901. Hence, you 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.

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 silver coins would have been a GST-free or input taxed supply if it had been a supply.

As advised in Question1, the silver coins you have imported are precious metal. Relevant to the supply of these silver coins is section 38-385 and 40-100 of the GST Act.

Section 38-385 of the GST Act

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

(c) the *recipient of the supply is a *dealer in precious metal.

You advise that you are not a dealer in precious metal. Section 38-385 of the GST Act is therefore not applicable.

Section 40-100 of the GST Act

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

Section 40-100 of the GST Act contains no further requirements apart the supply being a supply of precious metal. Accordingly, if your importation of the silver coins has instead been supplies, these supplies would have been input taxed under section 40-100 of the GST Act.

Hence, in accordance with paragraph 13-10(b) of the GST Act, your importation of the silver coins will be a non-taxable importation.

Summary

To summarise, your importation of these silver coins is not a taxable importation, and therefore, GST is not payable by you on this importation.