Section 40-100 - Precious metals
Under section 13-5 of A New Tax System (Goods and Services Tax) Act 1999 (the GST Act), you make a taxable importation if you import the goods for home consumption. However, the importation is not a taxable importation to the extent that it is a non-taxable importation.
An importation of precious metal will be a non-taxable importation if it would have been a supply that was GST-free or input tax if it had been a supply.
Unless the importations of precious metal meet the requirements below, they will be taxable importations.
GST-free supply
Under section 38-385 of the GST Act, the first supply of precious metals after its refining by the refiner, or on behalf of the supplier will only be GST-free if the recipient of the supply is a dealer in precious metals.
As defined under section 195-1 of the GST Act, 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 of at least 99.5% fineness.
No regulations have been made to specify any other substance.
To be precious metal for the purposes of GST, the metal must therefore be gold, silver or platinum.
A dealer in precious metal means an entity that satisfies the Commissioner that a principal part of carrying on its enterprise is the regular supply and acquisition of precious metal.
A refiner of precious metal means an entity that satisfies the Commissioner that it regularly converts or refines precious metal in carrying on its enterprise.
The expression 'in an investment form' means the metal must be in a physical form that is capable of being traded on the international market by entities which trade in such a market. Bullion coin is only traded in for the metal value at the prevailing spot price.
Input taxed supply
Section 40-100 of the GST Act provides that a supply of precious metal as defined in section 195-1 is input taxed. If a supply is input taxed, then no GST is payable on the supply, and there is no entitlement to an input tax credit for anything acquired or imported to make the supply.
Money and other things
Subsection 9-10(4) of the GST Act states that a supply does not include a supply of money unless the money is provided as consideration for a supply that is a supply of money.
Section 195-1 of the GST Act, defines money to include currency but does not include:
a collector's piece, or
an investment article, or
an item of numismatic interest, or
currency the market value of which exceeds its stated value as legal tender in the country of issue.
Money includes Australian and foreign currency notes and coins and a supply of these things do not constitute a supply where they are supplied as currency in the form of payment to discharge an obligation. It is a financial supply and input taxed as described in Sub-regulation 40-5.09 (3) item 9 of the GST Act.
Where money is supplied as an item of numismatic interest, collector's piece and investment article, this is a supply of goods and generally is a taxable supply where it satisfies section 9-5 of the GST Act. Where it satisfies the definition of precious metal, it is an input taxed supply.
Please refer to ATO GST ruling GSTR 2003/10: What is precious metal for the purposes of GST?
