Private ruling: goods and services tax (GST) and importation of precious metal
Published: October 2011
Date scheme commenced: You purchased silver bars and coins.

Ruling: Q1: Is GST payable on your importation of the silver bars and coins? | A1: No.

Relevant facts and circumstances: You purchased silver bars and coins. The coins are certain sorts of coins. You purchased the silver items from a certain entity. The invoice trade number is a certain number. The order numbers are certain numbers. You imported the silver items into Australia. You have entered the silver items for home consumption (within the meaning of the Customs Act 1901 ). The silver items bear marks or characteristics accepted as identifying and guaranteeing their fineness and quality. The values of the silver items are determined by reference to the spot prices of the metal they contain - silver. The silver items are 99.9 % pure. You are not a dealer in precious metals.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 subsection 7-1(1) | A New Tax System (Goods and Services Tax) Act 1999 paragraph 9-30(3)(a) | A New Tax System (Goods and Services Tax) Act 1999 subsection 13-5(1) | 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 38-385 | A New Tax System (Goods and Services Tax) Act 1999 section 40-100

Reasons for decision: Summary: GST is not payable on your importation of the silver bars and coins, as it is an importation of precious metal. | Detailed Reasoning - Detailed reasoning: In accordance with subsection 7-1(1) of the A New Tax System (Goods and Services Tax) Act 1999 (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: 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 were imported, that is, silver bars and coins. Hence, the requirement of paragraph 13-5(1)(a) of the GST Act was satisfied. You entered these goods for home consumption within the meaning of the Customs Act 1901 . Hence, you satisfied 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 silver items would have been a GST-free or input taxed supply if it had been a supply. In accordance with section 38-385 of the GST Act, a supply of precious metal is GST-free it the requirements of that provision are satisfied. 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. Section 40-100 of the GST Act states that a supply of precious metal is input taxed. In accordance with paragraph 9-30(3)(a) of the GST Act, a supply that would otherwise be GST-free and input taxed is generally GST-free. Section 195-1 of the GST Act defines precious metals. The definition includes silver (in an investment form) of at least 99.9% fineness. Paragraph 29 of Goods and Services Tax Ruling GSTR 2003/10 summarises what is silver in investment form. It 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. In your case, you imported silver bars and coins. The silver items bear marks or characteristics accepted as identifying and guaranteeing their fineness and quality. The silver items are traded at a price that is determined by reference to the spot price of the metal they contain - silver. Hence, the silver items are silver in investment form. Additionally, the silver items have at least 99.9% fineness. Hence, the silver items are precious metals for the purposes of the GST Act. If your importation of the silver items had instead been supplies, these supplies would not have been the first supplies of precious metal after their refining by or on behalf of the refiner. Additionally, you are not a dealer in precious metals. Hence, the requirements of paragraphs 38-385(a) and 38-385(c) of the GST Act would not have been satisfied if the importation had instead been a supply. Consequently, if your importation of the silver items had instead been supplies, they would not have been GST-free supplies under section 38-385 of the GST Act, as it would not have satisfied all of the requirements of that provision. If your importation of the silver items had instead been supplies, these supplies would have been supplies of precious metal, and therefore, input taxed under section 40-100 of the GST Act. Hence, in accordance with paragraph 13-10(b) of the GST Act, your importation of the silver items is a non-taxable importation. Consequently, your importation of the silver items is not a taxable importation, and therefore, 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.