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Ruling

Subject: GST and importation of precious metal

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. The silver coins that you have imported are precious metal under the GST Act.

Question 2

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

Answer

No. GST is not payable on the importation of these silver coins into Australia.

Relevant facts

You purchased some silver coins from an overseas bullion dealer.

You are not a dealer in precious metal.

You purchased these silver coins as part of your precious metals holdings and investment portfolio.

The silver coins contain a minimum of 99.9% fine silver and their weight and purity is government guaranteed.

The coins are purchased at the silver spot price.

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 A New Tax System (Goods and Services Tax) Act 1999 (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 provides a summary of what constitutes 'an investment form'. It states that 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.

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

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

· the weight and purity of the silver coins are guaranteed by the overseas government

· the silver coins are traded at a price that is determined by reference to the spot price of silver.

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

Therefore the silver coins you have imported are precious metals under the GST Act.

Question 2

Section 13-15 of the GST Act provides that you must pay the GST payable on any taxable importation that you make.

Subsection 13-5(1) of the GST Act provides that you make a taxable importation if:

· goods are imported; and

· 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.

In this 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 is not a taxable importation to the extent that it is a non-taxable importation.

Non-taxable importation

Section 13-10 of the GST Act provides that an importation is a non-taxable importation if:

(a) it is a non-taxable importation under Part 3-2; or

(b) it would have been a supply that was GST-free or input taxed if it had been a supply.

An importation of items considered to be precious metal will be a non-taxable importation if it satisfies the requirement of subsection 13-10(b) of the GST Act.

For a supply of precious metal to be either an input taxed supply or a GST-free supply it must satisfy all the following requirements:

· it must be a supply of precious metal as defined in section 195-1 of the GST Act; and

· meet the requirements set out under section 38-385 of the GST Act; or

· meet the requirements set out under section 40-100 of the GST Act.

Only the importations of items that are determined to be precious metal and are either GST-free or input taxed will be a non-taxable importation.

GST-free supply of precious metal

A supply of precious metal 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 metal is a refiner of precious metal; and

· the recipient of the supply is a dealer in precious metal.

Note: Any other supply of precious metal is input taxed under section 40-100 of the GST Act.

Paragraphs 16 of GSTR 2003/10 discusses the requirements contain in section 38-385 of the GST Act. It states:

Section 38-385 accords GST-free status to certain supplies of precious metal. To have this GST-free status one of the requirements is that the metal has been refined by a refiner of precious metal. To be a refiner of precious metal, an entity has to satisfy the Commissioner that the entity regularly converts or refines precious metal in carrying on its enterprise. Another requirement is that the supply is made to a dealer in precious metal. To be a dealer in precious metal, an entity has to satisfy the Commissioner that a principal part of carrying on the entity's enterprise is the regular supply and acquisition of precious metal.

In this case, you are not a dealer in precious metal. Section 38-385 of the GST Act is therefore not applicable.

Input taxed supply of precious metal

Section 40-100 of the GST Act states that any 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 had instead been a supply, this supply 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 is a non-taxable importation.

Conclusion

Your importation of the silver coins is not a taxable importation, and therefore, GST is not payable by you on this importation.