SECOND HAND GOODS & GST
When goods are purchased from someone who is not registered or required to be registered for GST
it is not generally possible for the purchaser to claim back GST credits in relation to the purchase. However, the GST system contains some special rules for taxpayers who carry on a business of buying and selling second hand goods.
In this case the business can potentially claim notional GST credits in relation to second hand items purchased from private vendors. Certain items are excluded from these rules, including certain goods that consist of gold, silver, platinum etc.
The ATO has released a draft determination explaining the practical application of the exclusion for goods that would be precious metal if they were of the required fineness and in an investment form.
This would be particularly relevant for jewellers, pawn shops and other businesses that buy and sell items that buy and sell unwanted jewellery, watches, coins etc.