The legal proceedings, which date back to 2013, pertain to an alleged scheme to avoid paying the goods and services tax (GST) on precious metals that have been refined from scrap.
Prior to a change in the GST Act in 2017, individuals and businesses were able to buy GST-exempt gold bullion and sell it to refiners. The refiners would then process the gold and sell it with GST added, legally claiming the GST back from the ATO as an input tax credit.
In a 2013 statement, the ATO alleged that some refiners and gold bullion sellers had formed ‘syndicates’ to exploit the GST loophole.
As a result, the ATO refused to refund GST to several gold refiners and issued them with retrospective tax assessments. The decision lead to the collapse of several businesses, including EBS – a former division of ABC Bullion – which appointed liquidators Schon Condon.
The liquidator subsequently challenged the ATO’s decision at the AAT. Following a 15-month deliberation, the AAT found in the ATO’s favour on 20 December 2019.
Will Day, deputy commissioner ATO, said, “The Tribunal found that these artificial arrangements dealing in gold were a tax driven scheme. 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.”
However, legal representatives for Schon Condon indicated that the decision would be appealed. Decisions by the AAT must be appealed to either the Federal Court or the Federal Circuit Court.
More reading:
New precious metal laws combat gold GST fraud
Melbourne jewellery robberies linked to gold GST fraud