Private ruling: GST and importation
Published: March 2012

Ruling: Q1: 1. Will your importation of gold be a taxable importation? 2. If your importation of gold will be a taxable importation, will you be entitled to claim input tax credits for the importation? 3. Is it possible not to pay the goods and services tax (GST) at the time of import | A1: 1. Yes, your importation of gold will be a taxable importation. 2. Yes, you will be entitled to claim input tax credits for the importation. 3. No, it is not possible not to pay the GST at the time of import unless you have the approval of the Commissioner of Taxation (Commissioner) to make deferred payments

Relevant facts and circumstances: You are registered for GST. You are commencing a business of purchasing smelted cast gold from small scale gold retailers overseas. The gold that you will purchase has a fineness of 80-98% and is smelted and cast. It is a roughly cast block or lump of metal that requires further manufacturing. After buying the gold, you will import it into Australia either by bringing them with you in the aircraft when you return to Australia, or by sending it to Australia through secure post or a third party courier. You will complete all customs documentation as the owner of the gold. You will sell the gold to a refiner or a commercial gold buyer in Australia. You will not sell the gold retail.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 13-5, | A New Tax System (Goods and Services Tax) Act 1999 section 13-10, | A New Tax System (Goods and Services Tax) Act 1999 section 15-5, | 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 and | A New Tax System (Goods and Services Tax) Act 1999 section 195-1.

Reasons for decision: Summary: (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. In this case, the gold will be imported into Australia; and you will enter the gold for home consumption by completing all customs documentations as the owner of the gold. The requirements in paragraphs 13-5(1)(a) and 13-5(1)(b) of the GST Act will be satisfied. Therefore, the importation of the gold will be a taxable importation unless it is a non-taxable importation. Section 13-10 of the GST Act 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. Non-taxable under Part 3-2 Part 3-2 of the GST Act, particularly section 42-5 of the GST Act, deals with importation of goods that are non-taxable importations in accordance with the Customs Tariff Act 1995 . As the Customs Tariff Act 1995 is administered by Customs, it is a matter for Customs to determine if an importation is covered by items referred to in section 42-5 of the GST Act. GST-free supply Section 38-385 of the GST Act provides that 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. 'Precious metal' is defined in section 195-1 of the GST Act to mean: (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. Currently, the regulations have not specified any other substance. The gold that you will be importing has a fineness of 80-98%. Therefore, the gold that you will be importing is not a precious metal for GST purposes. Accordingly, had the importation been a supply, that supply will not be GST-free. Input taxed supply According to section 40-100 of the GST Act, a supply of precious metal is input taxed. As explained above, the gold that you will import is not a precious metal; thus section 40-100 of the GST Act will not apply. Had the importation been a supply, that supply will not be input taxed. Your importation of the gold will not be a non-taxable importation under paragraph 13-10(b) of the GST Act. Therefore, your importation of the gold will be a taxable importation. 2. Entitlement to input tax credits arise on creditable acquisitions and creditable importations. Section 15-5 of the GST Act states: You make a creditable importation if: (a) you import goods solely or partly for a *creditable purpose; and (b) the importation is a *taxable importation; and (c) you are *registered, or *required to be registered. You advised that you will import the gold and sell them to a refiner or a commercial gold buyer in Australia. Your sale of the gold would not be input taxed. Furthermore, your importation of the gold will not be of a private or domestic nature. Thus, you will import the gold for a creditable purpose. The importation of the gold will be a taxable importation and you are registered for GST. All the requirements in section 15-5 of the GST Act will be satisfied. Therefore, you will make a creditable importation when you import the gold. Accordingly, you will be entitled to the input tax credits on the importation of the gold. 3. Subsection 33-15(1) of the GST Act provides that the amounts of GST on taxable importations are to be paid by the importer to the Commonwealth: (a) at the same time, at the same place, and in the same manner, as customs duty is payable on the goods in question (or would be payable if the goods were subject to customs duty); or (b) in the circumstances specified in the regulations, within such further time specified in the regulations, and at the place, and in the manner specified in the regulations. Therefore, you must pay the GST on the importation of the gold at the same time, at the same place, and in the same manner as you will pay the customs duty on the gold. For the purpose of paragraph 33-15(1)(b) of the GST Act, an entity may apply to the Commissioner for approval to make deferred payments of GST on taxable importations. The application must be made in an approved manner and contain the information required by the Commissioner. A New Tax System (Goods and Services Tax) Regulations 1999 Regulation 33-15.03 provides that the Commissioner must approve an entity's application if the Commissioner is satisfied that: (a) the entity is registered for GST; (b) the entity has an Australian business number (ABN); (c) if the entity is an individual, the entity is not an undischarged bankrupt; (d) the tax period applying to the entity is each individual month (monthly tax period); (e) if the entity is a member (but not the representative member) of a GST group, the representative member of the group is an approved entity; (f) the bank guarantee (if any) required under regulation 33-15.04 has been provided; (g) the entity will be able to comply with the requirements under subregulation 33-15.06(1); and (h) it would not be appropriate to refuse the application. An entity approved to defer payments of GST on taxable importations must pay the GST to the Commissioner on or before the 21 st day after the end of the month in which the liability for the GST arose. Information about the Deferred GST (DGST) Scheme is available from the ATO website at www.ato.gov.au

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