[Australia] wholesale sales tax and GST

Dear Aussie Orchid members,

Now that the dreaded first BAS statement is due from all GST (goods
and services tax) registered people, I have had conflicting advice
ref being able to claim back the wholesale sales tax on raw
materials…specifically silver, gold as well as diamonds. I was led
to believe at the seminars I attended Pre GST that as long as we did
a stocktake, and could prove that we had purchased the items, I.e.
through sales dockets showing the sales tax, we had until end of
December to reclaim this sales tax. It was felt that having already
paid between 22-30% for metals and diamonds etc, it was unfair to add
another 10% on top of that. If it is not possible to claim refund, is
it possible to claim a loss from sales tax paid?. I feel that my
prices have had to come down to compensate for cheaper raw materials
that are now available as I can claim GST back on theses items.
However I am theoretically carrying a loss on other materials in
stock. I would really appreciate knowing what other jewellers have
been told. If possible with some type of ref number etc. Any advice
on how others plan to cope with this considerable problem, would be
much appreciated.

Many thanks to Dr Aspler for this great forum

Felicity Peters In West Oz… where the sun always shines!

Hi Felicity

My understanding is that the wholesale tax can only be claimed back
on finished goods, not raw materials, but don’t take my word for it
ask an accountant, or even better the ATO but be prepared to kept on
hold. I’ve received so much conflicting some of which
came from the ATO. I know how you’re feeling. Brain Tucker is the
leading Arts Accountant in Queensland, he spoke at the JMGA conference
and dealt with issues like this. He has a website that has information
from artists, you might like to visit it: www.briantucker.org You could
also try Arts Law. I know the Queensland Arts Law Accountants are
very willing to address practitioners questions.


Hi Felicity, I spent most of June trying to find info on this subject
after my accountant told me that I couldn’t claim any of the sales
tax that I had paid. I found that every other artist/jeweller ( that
I knew) in South Aust had been told that they could claim it, so I
started looking into it.I consulted a number of arts accountants who
all initially said yes, claim it, then they all got back to me and
said sorry, don’t think you can.The tax office provided conflicting
info originally, but eventually got back to me with the answer “no,
you can’t claim it, you are classed as a manufacturer”, but they
suggested I write for a ruling, as they all seemed so unsure. I
didn’t end up writing, as when I attended the JMGA conference, all
the interstate jewellers seemed to have already been told by their
accountants that they couldn’t claim it, and the first speaker was
Brian Tucker ( as Elizabeth mentioned in her email) who also said
that there was no way to claim this, and also mentioned that he
thought there was no point in fighting it, because of the
manufacturing classification. I have now phoned Artslaw and am
waiting for them to get back to me. I’ll see what advice they can
give, and also if they think there’s any point in getting a written
ruling. I’ll let you know the answers, - Cheers, Christine

Dear Christine,

Thank you for the info on the research into wholesale tax. I look
forward to your reply from Artslaw. Of course the tax office idea of
manufacturers is rather different from the real world that
contemporary jewellers in Australia struggle to survive in. I think we
are all being lumped into the “trade” jewellery basket. What we
really need is some kind lawyer to make a test case of a
contemporary/art jeweller/ object maker’s practice.

Best wishes

Felicity Peters In West Oz.

Hi Felicity, after sending some more info, I checked my mail and saw
your reply, and I think that you are right, we are being lumped in
with the trade, whereas our practise should dictate a nexus with
other artists.Artslaw also suggested that our “industry body”- I
think that’s us- might try lobbying against this, and trying for an
exemption, but warned that this would be time consuming and difficult
to achieve. I’ll keep you updated, Christine.

Hi Felicity, The tax office has just explained to me that no part of
the wholesale tax already paid by us on materials is claimable.
Apparently because the metals, etc. are then made into other goods
for sale, it dosn’t count as reselling on, and therefore we can’t
claim the tax paid. e.g. if we bought watches to resell before
30-6-00, we could claim the tax paid, but as we make jewellery from
silver, gold, or whatever, it’s classed as manufacturing, and is not
claimable.The Artslaw assoc. suggested that I get a ruling so at
least it’s in writing. Christine.

Hi Christine,

It might take a while but I certainly think lobbying is a good idea.
I am going to contact CraftWest and Craft Australia on Monday, and at
least start the ball rolling. May I suggest that other metalworkers in
a similar position do the same. It would be interesting to know
whether ArtsLaw are prepared to be involved. I have started
stocktaking raw materials etc just in case we can achieve
something. Keep in touch.

Felicity Peters In West Oz.

Hi Christine

The Arts Law suggestion of getting our “industry body” to represent
us is good, or at least it couldn’t hurt. I just can’t quite imagine
the tax office being keen to make changes, but it is still worth
trying. The industry bodies that would be in the best position to
pursue this would be the likes of The National Association of Visual
Artists, Craft Australia, and all the various funded state Craft and
Arts organisations. The issue is of relevance for all artists not
just jewellers and metalsmiths working in the arts. NAVA did a lot of
agitating in the lead up to the introduction with some success. I
have a feeling that this issue is one that was on their agenda…