Edited version of private ruling

Authorisation Number: 1011850839432

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Ruling

Subject: GST and import of precious metals

Question

Is your importation of bullion bars and coins of 99.9% fineness from an overseas mint a non-taxable importation under section 13-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Decision

Yes, your importation of bullion bars and coins of 99.9% fineness from an overseas mint is a non-taxable importation under section 13-10 of the GST Act.

Relevant facts and circumstances

You are a dealer in silver bullion bars and coins. You have been importing silver bullion bars and coins from the X Mint for a number of years. Once you import them, you advertise them and sell them to different buyers.

The bars and coins have a special stamp guaranteeing their purity or fineness. They are stamped as 999, which means 99.9% pure silver.

The coins are not numismatic coins. They are bullion coins used purely for investment purposes.

The price of your purchase is determined by reference to the prevailing spot price for the metal. You sell the silver bullion bars and coins based on the international spot price for silver.

These bars and coins are made by the X Mint out of silver refined by them.

Your purchase of the silver bars and coins is the first purchase of them after refining.

Your shipping and transport agent is linked to the Customs Department (Customs). When you receive a shipment of silver bars and coins and if any GST has to be paid to the Customs, your shipping and transport agent first collects it from you and pays it to the Customs.

You have recently received a shipment of silver bullion bars and coins from the X Mint through your shipping and transport agent. Customs will not release it unless you pay GST on it. More shipments are on the way. You told them that an importation of silver bullion bars and coins of 99.9% fineness is GST exempt.

Reasons for the decision

Section 13-5 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.

Note: There is no registration requirement for taxable importations and the importer needs not be carrying on an enterprise.

Section 13-10 of the GST states:

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.

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.

Note: any other supply of precious metal is input taxed under section 40-100.

Section 195-1 of the GST Act provides that:

· 'precious metal' means amongst other things, silver in an investment form of at least 99.9% fineness.

· 'a refiner of precious metal' means an entity that satisfies the Commissioner that it regularly converts or refines precious metal in carrying on its enterprise.

· 'a dealer in precious metal' means an entity that satisfies the Commissioner that a principal part of carrying on its enterprise is the regular supply and acquisition of precious metal.

According to the facts provided the silver you import has a fineness of 99.9%. You also informed us that you import bullion coins used purely for investment purposes.

We consider that the X Mint satisfies the definition of a refiner of precious metal.

You have also informed us that you are a dealer in precious metal.

Goods and Services Tax Ruling GSTR 2003/10 (GSTR 2003/10) refers to what is precious metal for the purposes of the GST Act. Paragraph 29 of GSTR 2003/10 provides 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; and

· 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.

In this case the bars and coins:

· are made by the X Mint out of silver refined by them and they are capable of being traded on the international bullion market;

· are stamped as 999, which means 99.9% pure silver; and

· are traded at a price that is determined by reference to the spot price of the metal they contain.

Therefore, based on the given facts, we consider that the silver bullion bars and coins you import are in an investment form and they can be treated as precious metal.

Accordingly your importation of silver bullion bars and coins will satisfy subsection 13-10 of the GST Act as a non-taxable importation.