GST on Investment-Grade Precious
From 1 October 2012, investment-grade gold, silver and platinum will no longer be subject to 7 per cent Goods and Services Tax (GST), as announced in this year's Budget by the Minister for Finance.
The move is a key measure to boost investment-grade precious metals (IPM) refining and trading in Singapore.
Singapore Customs, working with other government agencies like International Enterprise Singapore, Inland Revenue Authority of Singapore and Ministry of Finance, facilitates the implementation of this scheme.
To bring IPM into the country, traders need to make a customs declaration through TradeNet before importation.
The rationale behind the move is to put the GST treatment on par with other actively-traded financial assets such as stocks and bonds. The GST exemption aligns Singapore's treatment of IPM with the practices of Australia, UK
Internationally, the market for IPM has been expanding. In 2011, the global demand for gold, worth about US$205.5 billion, grew by 0.4 per cent. The growth was largely driven by investment demand from Asia. Singapore aims to grow its share of the global gold trading market from 2 per cent to 10-15 per cent in the next five to ten years.
To qualify for the exemption, IPM must be of a minimum purity and satisfy certain requirements to be categorised as investment-grade. For example, IPM must be tradeable on the international bullion market and bear an internationally-accepted identification that guarantees its quality.
Concurrently, 1 October 2012 saw the introduction of the Approved Refiner and Consolidator Scheme (ARCS) to ease cash flow for IPM refiners and local consolidators, with regards to GST payment on the import and purchase of raw materials and input tax relief. The scheme is administered by the Inland Revenue Authority of Singapore (IRAS).