|Currently, the import and supply of any gold and precious metals in Singapore are subject to GST at the standard-rate. The supply would be zero-rated if they are subsequently exported overseas, provided that the supplier maintains the requisite documentary proof.
GST would not be payable on the importation of the commodities into a Zero-GST Warehouse or under the Major Exporter Scheme. In addition, any supplies of the commodities made within the Zero-GST warehouse would also not be subject to GST.To develop a new refining and trading cluster in Singapore, the import and supply of investment-grade gold and precious metals would be treated as exempt supplies, similar to the supply of financial services.
Investment-grade gold refers to gold (e.g. a bar, ingot, coin or wafer) in purity of 99.5% and above, possesses the following characteristics that differentiate it from gold in other forms such as jewellery:
- i. capable of being traded on the international bullion market;
- ii. bears a mark/characteristics accepted as guaranteeing its quality; and
- iii. trade at a price based on the spot price of the metal it contains.
On the other hand, precious metals refer to investment-grade silver in purity of 99.9% and above, and investment-grade platinum in purity of 99% and above, which possess the same characteristics as investment-grade gold.
Measures would be introduced to ease cash flow and compliance of qualifying refiners and local consolidators of precious metals in the payment of input GST on import and purchase of raw materials.1 October 2012By extending GST exemption to the supply of investment-grade gold and precious metals, the Government recognises the increasing demand of such product as financial assets, just like other financial instruments that are actively traded. It is also a move towards developing Singapore as a new refining and trading cluster for such products and thereby strengthening Singapore's position as an international financial centre and trading hub.
The exemption would also help ease the compliance costs for the gold industry players by removing the documentary requirements to substantiate the export of such gold and precious metals.
Industry players should be mindful of the partial exemption implications on input tax recovery due to the exempt supplies made.
The IRAS would release further details of the changes by 1 September 2012.