Edited version of private ruling

Authorisation Number: 1011801435891

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Ruling

Subject: GST and importation of medallions

Questions

Are the silver medallions you have already imported 'precious metals' under the GST Act?

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

Are the other medallions you will be importing in the future, 'precious metals' under the GST Act?

Will GST be payable on the importation into Australia of the other medallions?

Answers

Yes, the silver medallions you have already imported are 'precious metals' under the GST Act.

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

Yes, the other medallions you will be importing in the future are 'precious metals' under the GST Act.

No, GST is not payable on the importation into Australia of the other medallions.

Facts

You recently purchased silver medallions from an overseas vendor (the vendor).

You are not a dealer in precious metal and you purchased these silver medallions as an investment.

The silver medallions are 1 ounce of 99.999% pure silver, which is guaranteed by an independent assessor's report that is available for viewing at the vendor's website.

The silver medallions are capable of being traded on the international market.

The price of the silver medallions is not determined by their novelty, rarity, condition or beauty.

These silver medallions are not a rare and collectible product and are still being produced.

Each silver medallion is marked with '.99999 Extra-Fine Silver 1OZ' on one side, with a picture on the other side.

You will be importing similar types of medallions (other medallions) from the same vendor in the future. These other medallions will have the same characteristics as the silver medallions except that they may be gold, have a different picture on one side and be a lesser weight.

Reasons for decision

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 the ATO's view 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.

In your case, the silver medallions you imported are traded on the international market.

The silver medallions bear marks or characteristics accepted as identifying and guaranteeing their fineness and quality.

The silver medallions are traded at a price that is determined by reference to the spot price of silver - not by their novelty, rarity, condition or beauty.

Hence, the silver medallions are silver in investment form.

As the silver medallions has at least 99.9% fineness, the silver medallions is precious metal for the purposes of the GST Act.

Question 2

In accordance with subsection 7-1(1) of the A New Tax System (Goods and Services Tax) Act 1999 (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:

· 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.

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

In your case, goods will be imported, that is, the silver medallions. Hence, the requirement of paragraph 13-5(1)(a) of the GST Act will be satisfied.

You have entered goods for home consumption within the meaning of the Customs Act 1901. Hence, you will 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.

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

GST-free

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.

In your case, the importation of the silver medallions is not the 'first supply' of the precious metal and you are not a dealer in precious metal. As the supply does not meet the requirements of paragraphs 38-385(a) or 38-385(c) of the GST Act, it is not GST-free.

Input taxed

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

As we advised in Question 1 above, the silver medallions you have imported are precious metals. If your importation of the silver medallions had 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 medallions will be a non-taxable importation.

Consequently, your importation of these items is not a taxable importation, and therefore, GST is not payable by you on this importation.

Question 3

Section 195-1 of the GST Act defines precious metals to include gold or 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 the ATO's view 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.

In your case, the other medallions are traded on the international market.

The other medallions bear marks or characteristics accepted as identifying and guaranteeing their fineness and quality.

The other medallions are traded at a price that is determined by reference to the spot price of silver or gold - not by their novelty, rarity, condition or beauty.

Hence, the other medallions are silver or gold in investment form.

As the other medallions have at least 99.9% fineness, they are precious metals for the purposes of the GST Act.

Question 4

In accordance with subsection 7-1(1) of the A New Tax System (Goods and Services Tax) Act 1999 (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:

· 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.

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

In your case, goods will be imported, that is, the other medallions. Hence, the requirement of paragraph 13-5(1)(a) of the GST Act will be satisfied.

You intend to enter the other medallions for home consumption in a similar way to when the silver medallions entered Australia. Hence, you will 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.

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 other medallions would have been a GST-free or input taxed supply if it had been a supply.

GST-free

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.

In your case, the importation of the other medallions will not be the 'first supply' of the precious metal and you are not a dealer in precious metal. As the supply does not meet the requirements of paragraphs 38-385(a) or 38-385(c) of the GST Act, it will not be GST-free.

Input taxed

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

As we advised in Question 1 above, the other medallions you intend to import are precious metal. If your subsequent importation of the other medallions were instead supplies, these supplies would be 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 other medallions will be a non-taxable importation.

Consequently, your importation of these items is not a taxable importation, and therefore, GST is not payable by you on this importation.