Edited version of private advice

Authorisation Number: 1051669784191

Date of advice: 01 May 2020

Ruling

Subject: Goods and services tax and importation of precious metals

Question

Is your importation of the gold bars and coins a non-taxable importation under subsection 13-10(b) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

The importation of the gold bars and coins that are of 99.99% fineness and are in an investment form will be a non-taxable importation.

This ruling applies for the following period:

Period starting 1 June 2020 and ending 30 June 2021

The scheme commences on:

1 June 2020

Relevant facts and circumstances

You are currently living in Australia. Before moving to Australia, you lived in UK and have purchased some gold bars and coins as an investment over the years.

These gold bars and coins are stored in a bank's safe deposit in UK.

You are going to bring in these gold bars and coins into Australia in the near future.

The gold bars and coins you are going to bringing in are a mix of gold bars and coins that are of 99.99%, 90% and 91.7% fineness and are produced by various mints in different countries.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Subsection 13-10(b)

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 decision

Under subsection 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 need to determine whether the supply of the gold coins that you import into Australia would have been GST-free and/or input taxed had that supply been made in Australia.

Would the supply of the gold bars and coins when made in Australia be GST-free and/or input taxed?

In determining whether a supply of gold bars and coins would be GST-free or input taxed, it needs to be established whether these gold bars and coins are precious metal for GST purposes.

'Precious metal' is defined in section 195-1 of the GST Act as follows:

precious metal means:

(a) gold (in an investment form) of at least 99.5% fineness; or

(b) silver (in an investment form) of at least 99.9% fineness; or

(c) platinum (in an investment form) of at least 99% fineness; or

(d) any other substance (in an investment form) specified in the regulations of a

particular fineness specified in the regulations.

In your case, it means that only the gold bars and coins that have at least 99.5% fineness can be precious metals provided they are in investment form.

Paragraph 29 of Goods and Services Tax Ruling GSTR 2003/10 Goods and Services Tax: What is 'precious metal' for the purposes of GST? (GSTR 2003/10) summarises what is in an investment form for the purposes of GST Act and states:

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.

In your case, the items you are importing are gold bars and coins that are cable of being traded on the international bullion market.

Based on the information provided, the gold bars and coins that are of 99.99% fineness are produced by the XYZ accredited refiners for gold therefore, they all bear a hallmark that is accepted as identifying and guaranteeing fineness and quality.

These gold bars and coins are listed for sale in the X Bullion Market and other gold trading platforms and are usually traded at a price that is determined by reference to the spot price of gold.

As a result, the gold bars and coins are of 99.99%fineness and are in an investment form for GST purposes therefore meeting the definition of precious metal in section 195-1 of the GST Act.

Relevant provisions of the GST Act that apply to the supplies of the precious metals are sections 38-385 and 40-100. However given your circumstances, the relevant provision that applies to your circumstances is section 40-100 of the GST Act, as section 38-385 deals with the first supply of precious metals after refinement.

Input taxed supply of precious metals

Section 40-100 of the GST Act states:

A supply of precious metals is input taxed.

Note: If the supply is the first supply of precious metals after refinement, the supply is GST-free under section 38-385.

A supply of precious metal is input taxed under section 40-100 of 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 gold bar and coins is an input taxed supply of precious metals.

The supply of the 99.99% fineness gold bars and coins that you will import into Australia would be an input taxed supply had that been a supply made in Australia. As a result your importation of these 99.99% gold bars and coins into Australia is a non-taxable importation under subsection 13-10(b) of the GST Act and no GST is payable on your importation.

For completeness, the rest of the gold bars and coins will not meet the definition of precious metal as they do not meet the fineness requirement. As such, the importation of these items will not be a non-taxable importation.