GST/HST Rulings and Interpretations
Directorate
Place Vanier, Tower C, 10th Floor
25 McArthur Avenue
Vanier, Ontario
XXXXX K1A 0L5
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Attention: XXXXX
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April 3, 1998
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Subject:
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GST/HST INTERPRETATION
Importation of Gold Bars, Ingots or Powder into Canada
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Dear XXXXX
Thank you for your letter of October 22, 1997, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the importation of gold bars, ingots or powder into Canada. I apologize for the delay in responding.
Statement of Facts.
XXXXX proposes to import gold in the form of bars, ingots or powder into Canada from XXXXX[.]
The imported gold is approximately 22 carat and can vary from 91.6 - 93% pure.
The gold will undergo a smelting process at the Mint whereby it will become gold bullion at 99.990 - 99.995% pure.
The finished product will be sold to various Canadian financial institutions
Interpretation Requested
A. On importation, what, if any taxes and duties are applicable?
B. Is GST applicable to the price paid for the smelting process?
C. Is GST applicable to the final sale to the Canadian Financial institutions?
Interpretation Given
Based on the information set out above the following interpretations are provided:
A. Provided your interpretation of the Customs Tariff provisions are correct and the imported products fit the common definition of unwrought that is, they are not worked into a finished condition and they are being imported specifically for the purpose of being refined into precious metal, the provisions of section 3(b) of the Non-Taxable Imported Goods (GST) Regulations apply.
B. The service of smelting. the imported product by the Mint is a taxable service. If the service is made in a non-participating province, the supply will be subject to the GST at 7%. However, if the service is made in a participating province the supply will be subject to the HST at 15%.
C. With respect to the final sale to Canadian Financial Institutions, precious metals are zero-rated if the final product meets the definition of precious metal contained in section 123 of the Act and further satisfies the requirements of section 3 of Part IX of Schedule VI of the Act
The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST /HST Memoranda Series, do not bind the Department with respect to a particular situation.
For your convenience, enclosed is a copy of section 1.4 of Chapter 1 of the GST/HST Memoranda Series.
Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at 613 952-4294.
Yours truly,
Roy McKain
A/Senior Rulings Officer
Border Issues Unit
General Operations and Border Issues Division
GST/HST Rulings and Interpretations Directorate
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