Private ruling: GST and importations of unrefined metal products
Date of advice: 8 April 2019
Published: May 2019
Ruling period: On and from its date of issue
Date scheme commenced: 1 April 2019

Ruling: Q1: Are importations of specific samples and pure alluvial samples subject to GST under Division 13 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes, your importations of specific samples and pure alluvial samples are subject to GST under Division 13 of the GST Act.

Relevant facts and circumstances: You wish to import specific metal samples from overseas that have been freshly mined (from primary rivers) by yourself personally. You will import the specific metal samples either by mail or through airports in your luggage. You are applying for the private ruling in order to move through customs and ensure no misunderstanding occurs in relation to GST. The specific metal will come primarily as raw samples either with other materials (such as black sand) or completely separated on its own. You consider that the specific metal should be classified as a precious metal (as it should be at least 99.5% purity) as the specific metal is taken directly out of the river and remains in that form when delivered to Australia. There will be no smelting of the specific metal and it will not be worked in any way or into any product.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Division 13; | 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); | A New Tax System (Goods and Services Tax) Act 1999 Section 13-10(b); | A New Tax System (Goods and Services Tax) Act 1999 Section 42-5; | 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; | A New Tax System (Goods and Services Tax) Act 1999 Section 195-1 .

Reasons for decision: Summary: Under Division 13 of the GST Act, GST is payable on taxable importations. Section 13-5 explains that an entity makes a taxable importation if the goods are imported and entered for home consumption (within the meaning of the Customs Act 1901 ). GSTR 2003/15, at paragraphs 30 and 31, explains that: 30. Imported goods are entered for home consumption, within the meaning of the Customs Act, by an 'owner', as defined in that Act, [10] entering imported goods for home consumption. The imported goods are entered by lodging an import declaration in the name of the 'owner'. [11] 31. If you, as 'owner', lodge an import declaration 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. An importation of specific metal is considered to be an importation of goods and it is an importation for home consumption. As a result, importation of specific metal into Australia will be a taxable importation. However, the importation is not a taxable importation to the extent that it is a non-taxable importation. Section 13-10 explains that an importation is non-taxable 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 had it been a supply. Section 42-5 of the GST Act explains that an importation of goods is a non-taxable importation if the goods are covered by item 4, 10, 11, 15, 18, 21, 21A, 23, 24, 25, 26 or 27 in Schedule 4 to the Customs Tariff Act 1995. None of the specified items in Schedule 4 of the Customs Tariff Act 1995 cover importation of this specific metal. As a result, importation of specific metal is not a non-taxable importation under subsection 13-10(a) of the GST Act. 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. To establish whether your importation of the specific metal is a non-taxable importation, it needs to be determined whether the supply of the specific metal that your import into Australia would have been GST-free supply under section 38-385 of the GST Act and/or input taxed under section 40-100 of the GST Act had that supply been made in Australia. Section 38-385 and section 40-100 of the GST Act, only apply to supplies of where the specific metal meets the definition of a precious metal under section 195-1 of the GST Act. Section 195-1 defines a ‘precious metal’ as follows: precious metal means: (a) specific metal (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, the specific metal that you are importing would not be of at least 99.5% fineness as the specific metal is mined directly from the river and would contain other impurities. The fineness cannot be guaranteed until it has gone through a refining process. To be a precious metal for the purposes of the GST Act, the gold also needs to be in an investment form. Paragraph 29 of GSTR 2003/10 summarises what is ‘in an investment form’ for the purposes of GST Act 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 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, you are importing a specific metal that you have mined primarily from the rivers from overseas. The specific metal is not capable of being traded on the international bullion market as it is not a bar, wafer or a coin. The specific metal you mine does not bear a mark or a characteristic accepted as identifying and guaranteeing its fineness and quality. The specific metal that you are importing does not meet the requirements of being of at least 99.5% fineness and it is not ‘in an investment form’ and consequently does not meet the definition of precious metal under section 195-1 of the GST Act. As result, the supply of the specific metal that you will import into Australia would not be a GST-free supply under section 38-385 or an input taxed supply under section 48-100 as the specific metal does not meet a definition of a precious metal. Therefore, your importation of the specific metal will not meet the definition of a non-taxable importation under subsection 13-10(b) of the GST Act. Your importation of the specific metal is a taxable importation under section 13-5(1) of the GST Act.