Private ruling: GST and importation of precious metals
Date of advice: 23 June 2020
Published: July 2020
Date scheme commenced: The date of issue of the notice of private ruling

Ruling: Q1: Is your importation of gold coins and gold bars a non-taxable importation under subsection 13-10(b) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes.

Relevant facts and circumstances: You will bring into Australia some gold bars gold coins of investment grade (higher than 99.5% purity) that you have purchased as a personal investment over the years. These gold bars and gold coins are produced by London Bullion Market Association (LBMA) accredited refiners. You will also bring into Australia some gold coins that are of lower than 99.5% purity.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 subsection 13-10(b) | 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 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. We need to determine whether the supply of the gold bars and coins that you import into Australia would have been GST-free and/or input taxed had that supply been made in Australia. Would the supply of the gold bars and coins when made in Australia be GST-free and/or input taxed? In determining whether a supply of gold bars and coins would be GST-free or input taxed, it needs to be established whether these gold bars and coins are precious metal for GST purposes. 'Precious metal' is defined in section 195-1 of the GST Act as follows: precious metal means: (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. In your case, the gold coins of lower than 99.5% fineness that you are importing will not be precious metal as they have a lower than 99.5% fineness. The rest of the gold bars and coins you are importing that have a higher than 99.5% fineness will be precious metal if they are in investment form. Paragraph 29 of GSTR 2003/10 summarises what is in an investment form for the purposes of GST Act and states: 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, the items you are importing are gold bars and coins that are cable of being traded on the international bullion market. The gold bars and gold coins you are importing are produced by London Bullion Market Association (LBMA) accredited refiners for gold therefore, they all bear a hallmark that is accepted as identifying and guaranteeing fineness and quality. These items are listed for sale in the London Bullion Market and other gold trading platforms and are usually traded at a price that is determined by reference to the spot price of gold. As a result, the gold bars and coins are in an investment form for GST purposes and they meet the definition of precious metal in section 195-1 of the GST Act. Relevant provisions of the GST Act that apply to the supplies of the precious metals are sections 38-385 and 40-100. However, given your circumstances, the relevant provision that applies to your circumstances is section 40-100 of the GST Act, as section 38-385 deals with the first supply of precious metals after refinement. | Detailed Reasoning - Input taxed supply of precious metals: Section 40-100 of the GST Act states: A supply of precious metals is input taxed. Note: If the supply is the first supply of precious metals after refinement, the supply is GST-free under section 38-385. As stated previously, the gold bars and coins of at least 99.5% fineness that you will be importing are precious metals for GST purposes. 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 bars and coins is an input taxed supply of precious metals. The supply of the gold bars and coins of at least 99.5% fineness that you will import into Australia would be an input taxed supply had that been a supply made in Australia. As a result, your importation of these gold bars and coins into Australia is a non-taxable importation under subsection 13-10(b) of the GST Act and no GST is payable on your importation. The supply of the gold coins of lower than 99.5% fineness would not be an input taxed supply had that been a supply in Australia as they are not precious metal for GST purposes, therefore the importation of them would not be a non-taxable importation.