I have asked a couple of bullion dealers in the past about GST because they are quick to tell you it is chargeable on sovs. There is confusion as this extract from a thread from Goldpelican on 2010-07-08 shows:
Thought it was time this was made a sticky for once and for all.
This post does not contain taxation advice - if in doubt, contact the Australian Tax Office or an accountant.
This post is under discussion below, and the contents may be updated over time to reflect corrections etc.
From indirect tax - exemptions gst:
Section 40-100 in the GST Act, in conjunction with paragraph 13-10(b) in that Act, provides an exemption for precious metals.
The term 'precious metal' is defined in section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act). The section provides that 'precious metal' is:
1. gold (in an investment form) of at least 99.5% fineness; or
2. silver (in an investment form) of at least 99.9% fineness; or
3. platinum (in an investment form) of at least 99% fineness; or
4. any other substance (in an investment form) specified in the regulations of a particular fineness specified in the regulations.
There are three components to this definition.
* Firstly, the substance must be gold, silver, platinum, or specified in the regulations.
* Secondly, the substance must be of at least the specified fineness.
* Thirdly, the substance must be in an investment form.
No regulations have been made to specify any substance other than gold, silver or platinum. To be precious metal for the purposes of GST, the metal must therefore be gold, silver or platinum.
The requisite fineness is clear from the definition.
From Goods and Services Tax: What is 'precious metal' for the purposes of GST? (GSTR 2003/10)
7. The first supply of precious metal after its refining may be GST-free under section 38-385. Apart from transactions that fall within the ambit of section 38-385 (or section 38-185, which is about exported goods), supplies of precious metal are input taxed under section 40-100.
8. Precious metal is defined in section 195-1 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.
9. No regulations have been made to specify any other substance. To be precious metal for GST purposes, the metal must therefore be gold, silver or platinum.
...
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.
What does this mean?
In order to be "GST free" (more correctly, treated as input-taxed for GST purposes), precious metal must meet the above purities, and qualify as an investment form. Examples of investment forms are bullion bars, and legal tender bullion-quality or specimen-quality coins. Proof coins do NOT qualify as an investment form, and should be liable for GST to be collected. Palladium is not classed as a precious metal for GST purposes, and is therefore also liable for GST, regardless of form.
Examples of "GST free" silver in Australia:
* silver bars that are at least 99.9% fine
* silver bullion grade Kookaburra/Koala/Lunar coins from the Perth Mint
* some imported silver coins such as Canadian Maples, American Silver Eagles and Austrian Philharmonics
Examples of silver that SHOULD attract GST in Australia:
* Numismatic proof issue silver coins from the Perth Mint or RAM: non-investment form of silver
* UK Brittanias: 92.5% (sterling)
* $10 Australian coins such as State series: 92.5% (sterling), and non-circulating legal tender
The GST status of the 1966 50c coin is not clear to the author at this point in time:
* it is still legal circulating tender, and may be GST free
* it does not meet the definition of an "investment form" of silver, and may be GST liable
* it is the opinion of the author that this coin should be GST free, as it is legal circulating tender issued for circulation, however I have not seen a ruling to this effect
Examples of "GST free" gold in Australia:
* gold cast and minted bars that are at least 99.5% fine
* gold bullion grade Kangaroo/Lunar coins from the Perth Mint
* some imported gold coins such as Canadian Maples
Examples of gold that SHOULD attract GST in Australia:
* Numismatic proof issue gold coins from the Perth Mint or RAM: non-investment form of gold
* Sovereigns: 91.67% (22k)
* Krugerrands: 91.67% (22k)
* American Gold Eagles: 91.67% (22k)
* $200 10 gram Australian coins such as Koalas: 91.67% (22k) and non-circulating legal tender
