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hi, I have had business to deal in precious metals. lately…

Customer Question

hi, I have had business to...

hi,
I have had business to deal in precious metals. lately there have been a lot of confusion on what is precious metal for investment so it is classed as GST free. If you read the law the ATO has provided says that for any metal to be GST free 1 .it has to come from a refiner, 2 it should be of 99.5% purity 3. it should be in investment form i.e the person or a compny who is stamping it (who has to be refiner as well) should be recognised as bullion dealer and his stamp should at least be recognised in the local market to be excepted as a recognised stamp.
now I have made purchases from a dealer who is a scrap dealer but not a refiner at all, he not recognised as a refiner in the market, his business is not to refiner metals but to trade in precious metal scrap only. and his stamp is not recognised in the market at all. I checked it with a well known refiner to make sure if his bars would be classed as investment bars or not and it was bluntly refused to be excepted as gst free bar and was to be refined again even though it had a stamp saying 9999 on it.
now his invoices when issued said it is gst free item but actually accoding to the law as I have explained it does not classify as gst free. now I am being audited by ATO for gst and I am not sure which way they are going to treat it. if you look at the invoice only it says BULLION GSt Free but its actually not classed as Bullion for the reasons I Have explained you above.
So question is just because it says bullion on the invoice is it going to be treated as bullion or other factors be looked at as well the ones I have stated above.
can I be taken for frauding the system or that person will be?
can I be held liable for excepting those invoices which should have gst in them when they don't.(keeping in mind it can rightly be excepted that total includes gst as it qualifies as valid tax invoice).

Submitted: 9 years ago.Category: Australia Law

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Answered in 55 minutes by:

3/30/2014

Solicitor: Leon, Solicitor replied 9 years ago

Leon, Solicitor

Category: Australia Law

Satisfied Customers: 52,733

Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)

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Good Afternoon

A scrap metal dealer is not a refiner and therefor you would be charged GST for what you purchase.

As a purchaser it is not your issue. It is his because he has to pay GST to the government not you.

You have a Tax Invoice with a ABN on it that is all you need. The liability to charge GST is his not yours.

It becomes your issue if you are selling because as a seller you collect the GST and have to pay it to the government.

Does this make sense?

Customer reply replied 9 years ago

so if he has not charging gst in his invoices it is his fault not mine, as he is not qualified to sell that item gst free.

am I rightly to assume that total includes gst in the invoice as it is a valid tax invoice even though the invoice has nothing next to GST line not even a zero.

do u think the ATo can take me to court for gst fraud for excepting invoice that has nothing next to gst section and if I claimed gst credits for such invoices.

keeping in mind the law says

THE PERSON or ENTITY NEEDS TO SATISFY THE COMMISSIONER THAT HE IS A REFINER AND REFINING IS THE MAIN STREAM OF BUSINESS TO EARN MONEY.

for help please look at the bullion law on the ATO website.

Solicitor: Leon, Solicitor replied 9 years ago

Good Evening Ray

That is correct. He is responsible to collect it as the seller.

If it has an ABN number and his details it is a valid tax invoice.

You cannot be taken to court you have done nothing wrong. He can you can't.

To not charge you GST he has to satisfy the commissioner not you as the purchaser.

I Hope this is clearer?

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