Perth Bullion Liquidation

Discussion in 'General Precious Metals Discussion' started by nighttrader, Jul 9, 2019.

  1. Strawman

    Strawman Member

    Joined:
    Jun 29, 2011
    Messages:
    67
    Likes Received:
    3
    Trophy Points:
    8
    Location:
    Australia
    I got stuck in the middle of all this. I ordered 4 x 1oz 2019 gold kangaroos on 4 Jul. Their website was up and taking orders. The court ruling and receiver appointed on 2 Jul. On 9 Jul the receiver took possession of the PB facility. I made a direct deposit transfer on the same day I purchased, 4 Ju..

    Good news! The receiver released a circular yesterday (31/7) with with a new court ruling recognising that storage clients, as well as those who had paid but not been shipped, to be the rightful owners of the product and to arrange for collection.

    Thank you Argento for your explanation of the GST issue. What a scammy interpretation by the ATO!
    A quick point, your last para, isnt quite correct. The dealer wouldnt need to sell the bullion at more than 10% over spot to make money. The GST payable would be on the DIFFERENCE between the spot price and the sale price. So in his example, PB buying at $22 and selling at $24, the GST payable isnt on the $24, just on the mark-up, $2, so GST payable would just be 20c.

    A pertinent point: PB wouldnt have been able to claim input GST credits as there was no GST charged by Perth Mint on the sale in the first place. And under the tax gudelines the Mint should have been following the same ruling, charging GST on the difference above spot that they were selling to PB. Because of this PB would rightly have thought that as the mint (govt backed organisation) wasnt charging them GST their interpretation of the ruling was such that they wouldnt need to do so either.
    Clearly what is good for the goose isn't as good for the gander.

    A now in the light of this new use of cash restriction legislation tabled last Friday, and the timing of the PB receivership injunction (just 2 weeks after the big gold pop on 19 June!), not being a 'conspiracy theorist' but I think this is all related somehow. Scare people out of thinking that gold isn't a good idea and that cash in the bank is safer, then SLAM! announce that cash use is soon to be severely restricted. The new legislation is setting up for -3 to -4% negative interest rates here in Australia. Watch this space.
    ______

     
    66rounds likes this.
  2. Strawman

    Strawman Member

    Joined:
    Jun 29, 2011
    Messages:
    67
    Likes Received:
    3
    Trophy Points:
    8
    Location:
    Australia
    Sure, back-orders were not mentioned in the court ruling, however they have stated that uncollected paid orders, and storage holdings were the property of the customer.
    Back orders weren't specifically mentioned however the ruling basically states that what is yours is yours, and this would include unexecuted order contracts. You will get a refund if you can support your claim with deposit receipts etc.

     
  3. Captain Kookaburra

    Captain Kookaburra Well-Known Member Silver Stacker

    Joined:
    Apr 15, 2010
    Messages:
    4,978
    Likes Received:
    360
    Trophy Points:
    83
    Location:
    Melbourne
    Actually ... This statement is incorrect. The GST would be charged over the whole amount.

    If the interpretation above was correct then we wouldn't be in this situation at all.

    The ATO are demanding full GST. I have suggested many times that GST should only be charged on the non-metal component.

    If Only.
     
    alor, jultorsk, sctpc and 4 others like this.
  4. innerpath

    innerpath Member Silver Stacker

    Joined:
    Jan 28, 2013
    Messages:
    669
    Likes Received:
    11
    Trophy Points:
    18
    Location:
    Sydney, Australia
    Thanks Strawman for your explanation
     
    66rounds likes this.
  5. Strawman

    Strawman Member

    Joined:
    Jun 29, 2011
    Messages:
    67
    Likes Received:
    3
    Trophy Points:
    8
    Location:
    Australia
    Thank you Captain for correcting me on this. However correction to my statement, I should have said not spot price but purchase price.
    But if you are correct in what you say, that the ATO is charging GST on the whole amount then this is ridiculous, and it doesnt follow their very own rules on the way GST works.
    Businesses are always allowed to claim product costs and only add GST to the value-add component.
    eg A farmer with a commercial enterprise that sells firewood. He gets the wood for 'free' as he chops up dead trees on his farm. GST only kicks in when he sells it. Say at $10 per sack, plus 10% GST, $11 selling price. The retail customer is the one that pays the GST and the farmer includes this on his BAS, remitting the $1 to the ATO. If the farmer sells it to say a servo at that on-sells it for $12 plus GST, the retail customer then pays $13.20. The servo collects the $1.20 GST. However the servo claims an input tax credit of the $1 GST they paid to the farmer so the servos GST liability is only 20c and remits this on their BAS. So, the ATO gets their $1.20 GST ($1 from the farmer and 20c from the servo). There is no 'tax on a tax'.
    Moving the analogy to Perth Bullion. If they purchase gold at $2000 and sell for $2100, GST liability would be payable on the $100 mark up. They would claim input tax credits IF there was GST included in their purchase price.
    So Perth MINT should/would be selling to PB with GST added on. The miner kicks off the GST train when he sells ore to PM (collects and remits the GST). PM refines and sells with a margin to PB (and collects the GST on the value-add, claims the input tax credit, and remits the difference. PB collects GST on their margin and claims the input tax credit on their purchase).
    PB would therefore have no doubt that GST is payable because of the fact that they paid GST on the purchase, so if this was the case PB would be at fault if they were not paying GST on their margin. HOWEVER, if Perth MINT was NOT including GST in their sale to PB (under the rules of bullion not being a GSTable item), then PB would NOT collect or pay GST on their margin (under the rules of bullion not being a GSTable item).
    So, the question comes down to this. Did Perth MINT sell the bullion to PB with GST or not.
    -If YES, then PB would be in default if they were NOT collecting and remitting GST to the ATO. It would be very clear that this was a GSTable sale.
    -If NO, then it should be Perth MINT that the ATO should be going for, not PB!!!
    If there is no GST on bullion there should be no GST on bullion. If Perth MINT is claiming some sort of Royal, Commonwealth, Govt, Reserve status and because of this not adding GST to the sale to PB it is totally outside the GST rules for PB to be put on the hook for their markup.
    This is the crux of the matter the way I see it. Comments please, I would really like to understand exactly where GST kicked in along the chain from miner to final customer ie you and me.
     
    Gazzasore likes this.
  6. innerpath

    innerpath Member Silver Stacker

    Joined:
    Jan 28, 2013
    Messages:
    669
    Likes Received:
    11
    Trophy Points:
    18
    Location:
    Sydney, Australia
    Thanks Strawman, that's a really great explanation and the first time I have got my head around the key issue
     
  7. Strawman

    Strawman Member

    Joined:
    Jun 29, 2011
    Messages:
    67
    Likes Received:
    3
    Trophy Points:
    8
    Location:
    Australia
    Further to my last. The miner does not sell the ore to Perth MINT with GST added on because he has already paid royalties to the Commonwealth on what he has taken from the ground (no tax on a tax), so therefor the ATO view would view Perth MINT as the producer (with the miner and refiner all being rolled into one ie the farmer in my analogy. So if Perth MINT, being the Govt, the primary producer, and following the 'no GST on bullion rule, sells to PB without GST then this is where it get messy, and most likely where the trouble all started. If there is no GST on bullion there is no GST on bullion. PB would sell to customer with no GST (they would of course pay income tax on their profit margin income). If the ATO wants to switch the rules at the retail level (PB) then under the rules of no GST on bullion PB would be exempt from paying GST to Perth MINT, exempt from adding GST to the purchase-price component of the retail price, and charge GST only on their mark-up. If the ATO expects PB to charge GST on the full retail price then there IS GST on bullion!! It was most likely that PB was thinking that they some quasi Perth MINT status and didnt believe that GST was payable on their mark-up (between purchase price and retail price). PB is in fact a retailer and should be paying GST on their margin but weren't, and this is where PB got into trouble I bet.
     
    spannermonkey likes this.
  8. bron.suchecki

    bron.suchecki Well-Known Member

    Joined:
    Feb 12, 2016
    Messages:
    222
    Likes Received:
    284
    Trophy Points:
    63
    Location:
    Perth
    Strawman, just note there are three different types of GST:
    • GST Free - 0% rate, business can claim input tax credits for GST paid on supplies
    • Input Taxed - 0% rate, business CANNOT claim input tax credits for GST paid on supplies
    • Taxed - 10% rate, business can claim input tax credits for GST paid on supplies
    Dore is GST Free, Bullion is Input Taxed, Non-bullion/Collectibles are Taxed.
     
  9. Gigrantor

    Gigrantor Member

    Joined:
    Jul 25, 2013
    Messages:
    93
    Likes Received:
    20
    Trophy Points:
    8
    Location:
    Australia
    The latest circular and other details have just been released...
     
  10. Sham Bolic

    Sham Bolic Member

    Joined:
    Jul 27, 2019
    Messages:
    99
    Likes Received:
    18
    Trophy Points:
    8
    Location:
    Perth
    So - anyone gonna contest the $350 collection fee? or just cop it?
     
  11. innerpath

    innerpath Member Silver Stacker

    Joined:
    Jan 28, 2013
    Messages:
    669
    Likes Received:
    11
    Trophy Points:
    18
    Location:
    Sydney, Australia
    So if you’re Order is worth $250 it will cost you $350 to get it?

    My order is actually worth about $600 so it barely seems worth it for me and I’m sure there are many others with similar sized orders that are weighing up weather it’s even worth pursuing unless you can guarantee that your “picked goods” are actually set aside for you. What if you have a $1000 Order but only $250 worth are “picked goods”.

    But it’s a fantastic outcome for those with large orders...
     
    Last edited: Aug 2, 2019
  12. Gigrantor

    Gigrantor Member

    Joined:
    Jul 25, 2013
    Messages:
    93
    Likes Received:
    20
    Trophy Points:
    8
    Location:
    Australia
    My order is worth $1140 and it would cost me close to this to get from Victoria to Perth to pick it up and then I have to pay another $350 on top of this???
     
    innerpath and Sham Bolic like this.
  13. Sham Bolic

    Sham Bolic Member

    Joined:
    Jul 27, 2019
    Messages:
    99
    Likes Received:
    18
    Trophy Points:
    8
    Location:
    Perth
    Yeah its BS - we shouldnt have to pay 3 cents let alone $350 to get OUR OWN STUFF - what kind of legal system is australia working under? its outrageous
     
  14. innerpath

    innerpath Member Silver Stacker

    Joined:
    Jan 28, 2013
    Messages:
    669
    Likes Received:
    11
    Trophy Points:
    18
    Location:
    Sydney, Australia
    Maybe there is a trusted Stacker in Perth who we could pay $50 each or 2 x Silver coins from our orders to collect on our behalf a post to all the eastern states stackers
     
  15. Sham Bolic

    Sham Bolic Member

    Joined:
    Jul 27, 2019
    Messages:
    99
    Likes Received:
    18
    Trophy Points:
    8
    Location:
    Perth
    Its not a straightforward pickup - an appointment has to be made with the Liquidator and the $350 has to be paid before the appointment can even be requested let alone conducted.
     
    innerpath likes this.
  16. monopolize

    monopolize Well-Known Member Silver Stacker

    Joined:
    Mar 28, 2013
    Messages:
    1,148
    Likes Received:
    118
    Trophy Points:
    63
    Location:
    Melbourne
    Wow so your goods are being held to ransom... legally. Anyone know of any ASX listed administrators that I can invest in?
     
    Sham Bolic likes this.
  17. Sham Bolic

    Sham Bolic Member

    Joined:
    Jul 27, 2019
    Messages:
    99
    Likes Received:
    18
    Trophy Points:
    8
    Location:
    Perth
    $350 x 450 SDB holders (not even counting the allocated, unallocated and orders - which also cost $350 to claim) - that's almost $160,000 for just 4 weeks of paperwork. Absolute RORT!
     
    madaw1 likes this.
  18. madaw1

    madaw1 Well-Known Member

    Joined:
    Dec 5, 2011
    Messages:
    1,079
    Likes Received:
    563
    Trophy Points:
    113
    Location:
    Great Western Country
    We are all in wrong business!
     
    Sham Bolic likes this.
  19. Bullionme

    Bullionme New Member

    Joined:
    Jul 21, 2019
    Messages:
    11
    Likes Received:
    5
    Trophy Points:
    3
    The $350 fee is not limited to SDB holders. Allocated storage & sales order claims are also required to pay the $350 fees. Not to mention goods that are worth below $350 may not be worth claiming will go as unclaimed property. So, who knows how much money can be cranked up from all the fees.
     
  20. Sham Bolic

    Sham Bolic Member

    Joined:
    Jul 27, 2019
    Messages:
    99
    Likes Received:
    18
    Trophy Points:
    8
    Location:
    Perth
    How would the $350 figure have been arrived at? I'm guessing this was approved by the Court in the hearing a few days ago.
    Why isnt the Liquidator's costs (and profit incentive) taken out of the collapsed company's directors instead of its clients? It's like if a restaurant goes broke and then calling up all past diners and asking each of them for $350 to pay the liquidators - absolutely ludicrous! And I don't even see that the liquidators have performed any real function at all here - PBC could have just handed back our stuff directly - why bring in a middleman?
     

Share This Page