The Australian Taxation Office (ATO) welcomed the decision of the Administrative Appeals Tribunal (AAT) that has struck down an arrangement to obtain refunds from an artificial gold bullion processing and trading scheme.
“The Tribunal found that these artificial arrangements dealing in gold were a tax driven scheme,” Deputy Commissioner Will Day said.
“This decision clearly supports the ATO’s work in tackling schemes in the precious metals refining industry aimed at manipulating the GST treatment of gold.”
The scheme, prevalent in parts of the industry before a 2017 law change, involved gold bullion being damaged and sold to refiners by gold traders as scrap. The traders did not remit GST to the ATO, but the refiners claimed GST refunds. They then processed the gold and put it back into the scheme. The Tribunal found that processing the gold in the way the refiner had undertaken was not ‘refining’ for GST purposes.
“The Tribunal found that this particular refiner continued to claim input tax credits with reckless indifference to the GST consequences.”
“This decision sends an important deterrent message that the ATO will act to address this non-compliant behaviour to ensure the integrity of the GST system and providing a level playing field for honest businesses” Mr Day said.
“This action is important to safeguarding Australia’s tax and super systems.”
The ATO took action separately against the gold traders that were failing to remit the GST collected. This included assessing and penalising traders for underpaying GST and income tax.