Private ruling: GST and importation of coinage
Published: October 2011

Ruling: Q1: Are the silver coins that you have imported into Australia considered a 'precious metal' for the purposes of Subdivision 38-L and Subdivision 40-D of the A New Tax System (Goods and Services Tax Act) 1999 (GST Act)? | A1: Yes. | Q2: Is goods and services tax (GST) payable on the importation of the above mentioned silver coins into Australia? | A2: No.

Relevant facts and circumstances: You do not hold an Australian Business Number and are therefore not registered for GST. You are not an authorised dealer of precious metals or coins. You purchased some silver coins from a bullion dealer. The bullions coins are sold in bulk to a network of authorised purchasers. The coins are then on-sold to banks, brokerage companies, coin dealers, precious metal firms and wholesalers who meet prescribed requirements. A proof version of the coins is also produced. The coins are traded at a slight premium above the spot price of their metal content and the premium rarely changes. The price of the bullion coins are not determined by their novelty, rarity, condition or beauty; but completely determined by the spot price of the metal. The silver bullion coins you purchased from the dealer have been imported into Australia. Each coin is stamped on the back with '1 oz fine silver', which denotes 99.99% purity.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 40-100 | A New Tax System (Goods and Services Tax) Act 1999 Section 38-385 | A New Tax System (Goods and Services Tax) Act 1999 Section 13-5 | A New Tax System (Goods and Services Tax) Act 1999 Paragraph 13-10(b) | A New Tax System (Goods and Services Tax) Act 1999 Section 13-15 | A New Tax System (Goods and Services Tax) Act 1999 Section 13-20

Reasons for decision: Summary: Section 195-1 of the GST Act defines precious metals to include 'silver (in an investment form) of at least 99.9% fineness'. The term '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, Goods and Services Tax: What is 'precious metal' for the purposes of GST? (GSTR 2003/10) provides the Commissioners 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. These silver coins bear marks or characteristics accepted as identifying and guaranteeing their fineness and quality. These silver coins 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, these silver coins are silver in investment form. As the silver coins have at least 99.9% fineness, these silver coins are precious metals for the purposes of the GST Act. In accordance with subsection 7-1(1) of the 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: (1) You make a taxable importation if: (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. (* Denotes a term that is defined in section 195-1 of the GST Act) In your case, goods will be imported, that is, the coins. Hence, the requirement of paragraph 13-5(1)(a) of the GST Act will be satisfied. You have provided a copy of the Import Declaration prepared by your customs broker when the coins entered Australia. This confirms 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 coins would have been a GST-free or input taxed supply if it had been a supply. | Detailed Reasoning - 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 coins 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. | Detailed Reasoning - 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 bullion coins you have imported are a precious metal. Therefore, if your importation of the coins had instead been supplies, these supplies would have been input taxed under section 40-100 of the GST Act. Hence, you satisfy the requirement of paragraph 13-10(b) of the GST Act, and your importation of the coins will be a non-taxable importation. Consequently, your importation of these items is not a taxable importation under section 13-5 of the GST Act, and GST is not payable by you on this importation.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.