Private ruling: GST and importation of gold bullion coins
Published: July 2011

Ruling: Q1: 1. Are the pure gold bullion coins which you have imported 'precious metals' for goods and services tax (GST) purposes? 2. Is GST payable on the importation of these pure gold bullion coins? | A1: 1. Yes, the pure gold bullion coins which you have imported are 'precious metals' for GST purposes. 2. No, GST is not payable on the importation of these pure gold bullion coins.




Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: You are an individual and recently have imported some pure gold bullion coins from an overseas company. You are not a dealer in precious metal. | These gold coins are neither proof nor numismatic coins and the price for the coins is determined by the spot price of the gold. The coins are sold via the overseas company's website to the general public worldwide. The coins are purely investment form of gold bullion. | The gold coins carry all the required markings describing purity, weight and gold content. The markings on the coin read 1 oz fine gold .9999, mint mark and the year. Each gold bullion coin is supplied with a certificate of authenticity. | Question 1: The term precious metal is defined in section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). It states: | (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 | Goods and Services Tax Ruling GSTR 2003/10 (available at www.ato.gov.au) provides guidance on what is 'precious metal' for the purposes of the GST Act. | Paragraph 10 of GSTR 2003/10 explains that to be precious metal, a thing must be the metal gold, silver or platinum of specified fineness or a substance listed in the regulations. The gold, silver, platinum or other substance must also be in an investment form. | Currently, the regulations do not specify any form of metal that will be a precious metal under the GST legislation. Accordingly to be precious metal for GST purposes, the metal must be gold, silver or platinum and must also be in an investment form. | To be the metal gold, the item must have the character of the metal rather than the character of a thing made from the metal. | A factor that can point to whether something has lost its character as the metal gold is, whether it is traded at a price that is determined by a reference to the prevailing spot price for the metal. If something is not usually traded at a price determined by reference to the prevailing spot price of its metal content it is not being traded for its metal value only. For example, proof coins are traded at a price that reflects the quality of the finish over and above what is necessary to trade the metal value. | From the facts given, the bullion coins are made of the metal gold and the price of these medallions is determined solely on their metal content and is derived from the spot price of the gold. The bullion coins therefore have the character of metal gold. | What is 'in an investment form' is not defined in the GST Act. It will therefore take its ordinary meaning. The expression is covered under paragraphs 14 to 28 of GSTR 2003/10. | Paragraph 29 of GSTR 2003/10 provides a summary of what is in an investment form and states: | 29. 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 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 given, the bullion coins are in an investment form because: | · they are in tradeable form - the bullion coin is a coin (physical form) in which the metal is capable of being traded on the international bullion market for the metal gold; | · they bear the accepted mark or characteristic - the stamps on the bullion coins are accepted in the market as identifying its fineness and quality of the metal; | · the price is determined by the spot price - the bullion coins are traded by reference to the spot price for the time they are traded. | The bullion coins are therefore considered to be metal in the investment form. However, the definition of precious metal requires that the gold in investment form must be of a specified fineness. | Specified fineness: The definition of 'precious metal' requires that the gold (in an investment form) be of at least 99.5 per cent fineness. | The fineness of the gold in the medallion is 99.99 per cent. The definition of precious metal is therefore satisfied. | The gold bullion coins that you have imported are precious metals as defined in the GST Act. | Taxable importation: Section 13-5 of the GST Act provides that an entity makes a taxable importation if: | (a) goods are imported goods; and | (b) the entity enters the goods for home consumption within the meaning of the Customs Act. | However, an importation is not a taxable importation to the extent that it is a non-taxable importation. | Goods and Services Tax Ruling GSTR 2003/15 provides guidance on taxable and non-taxable importations under Division 13 of the GST Act. | Paragraphs 30 and 31 of GSTR 2003/15 explain when imported goods are entered for home consumption within the meaning of the Customs Act and state: | 30. Imported goods are entered for home consumption, within the meaning of the Customs Act, by an 'owner' as defined in that Act, entering imported goods for home consumption. The imported goods are entered by lodging an import entry in the name of the 'owner'. | 31. If you, as 'owner' lodge an import entry in your name, you enter imported goods for home consumption within the meaning of the Customs Act and you are liable to pay GST on that importation if the importation is a taxable importation. | From the information received, paragraphs 13-5(a) and 13-5(b) of the GST Act are met as you are importing the gold bullion coins for home consumption within the meaning of the Customs Act since you are the owner of the gold bullion coins in the Import Declaration. | However, the importation of the gold bullion coins is not a taxable importation to the extent that it is a non-taxable importation. | Non-taxable importation: Under subsection 13-10 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 the supply of those gold bullion coins in Australia would be GST-free and/or input taxed. | Is the supply of the gold bullion coins when made in Australia input taxed and/or GST-free? | As discussed in question 1, the gold bullion coins that you have imported are precious metals as defined in the GST Act. Relevant to the supply of the precious metals is sections 38-385 and 40-100 of the GST Act. | Section 38-385 of the GST Act | A supply of precious metals is GST-free under section 38-385 of the GST Act 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 metals is a refiner of precious metal; and | (c) the recipient of the supply is a dealer in precious metals. | You have advised that you are not a dealer in precious metals. Section 38-385 of the GST Act is therefore not applicable to you. | Section 40-100 of the GST Act | 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 bullion coins you have imported is an input taxed supply under section 40-100 of the GST Act as these gold bullion coins are precious metals as defined in the GST Act. | Your importation of the gold bullion coins is a non-taxable importation under paragraph (b) of section 13-10 of the GST Act and you therefore will not be liable to pay GST on the importation.