Need help- Oz GST laws when recut diamond is posted back

[Chloegal]

Hi everyone,
I have successfully sent out a diamond from Australia to BG to be recut and I will be sharing all the details with you after in order to give back to the amazing community here. Hopefully this will help others with their diamond research and knowledge.

However meanwhile I have an important question about getting a recut diamond sent back home to Australia. It is NOT being reset. I believe resetting of ones diamond is what makes the `whole` value of the ring subject to GST (totally unfair to pay GSTon one`s own diamond twice).

Am I correct that sending the diamond out to get recut and then getting it sent back home should make it excempt from GST?

Also, what if someone was to send their diamond to USA to get a GIA certificate, then get the diamond posted back? Would GST be charged and do you have to jump through hoops to get out of paying the GST in these cases?

I have a really good opportunity to get a GIA certificate here but would have to get the diamond sent home as opposed to me picking it up on my upcoming trip to NY.

TIA

 

[TRIALnERROR]

Hi everyone,
I have successfully sent out a diamond from Australia to BG to be recut and I will be sharing all the details with you after in order to give back to the amazing community here. Hopefully this will help others with their diamond research and knowledge.

However meanwhile I have an important question about getting a recut diamond sent back home to Australia. It is NOT being reset. I believe resetting of ones diamond is what makes the `whole` value of the ring subject to GST (totally unfair to pay GSTon one`s own diamond twice).

Am I correct that sending the diamond out to get recut and then getting it sent back home should make it excempt from GST?

Also, what if someone was to send their diamond to USA to get a GIA certificate, then get the diamond posted back? Would GST be charged and do you have to jump through hoops to get out of paying the GST in these cases?

I have a really good opportunity to get a GIA certificate here but would have to get the diamond sent home as opposed to me picking it up on my upcoming trip to NY.

TIA

I'm not an expert in tax law, but I don't believe you will be responsible for GST. "Customs and Tax law provides a duty and Goods and Services Tax (GST) free concession for certain items imported as unaccompanied personal effects provided certain requirements are met." As long as you have owned the ring for more than 12 months, you should be able to claim an exemption as an "unaccompanied personal effect". You must complete form (B534) in order for the ring to get cleared by customs. http://www.customs.gov.au/site/page5889.asp

Here's some additional info from WF regarding AUSFTA:
http://www.whiteflash.com/about-diamonds/faq/australiaunited-states-free-trade-agreement.htm

 

[nomissjane]

Hi everyone,
I have successfully sent out a diamond from Australia to BG to be recut and I will be sharing all the details with you after in order to give back to the amazing community here. Hopefully this will help others with their diamond research and knowledge.

However meanwhile I have an important question about getting a recut diamond sent back home to Australia. It is NOT being reset. I believe resetting of ones diamond is what makes the `whole` value of the ring subject to GST (totally unfair to pay GSTon one`s own diamond twice).

Am I correct that sending the diamond out to get recut and then getting it sent back home should make it excempt from GST?

Also, what if someone was to send their diamond to USA to get a GIA certificate, then get the diamond posted back? Would GST be charged and do you have to jump through hoops to get out of paying the GST in these cases?

I have a really good opportunity to get a GIA certificate here but would have to get the diamond sent home as opposed to me picking it up on my upcoming trip to NY.

TIA

I'm not an expert in tax law, but I don't believe you will be responsible for GST. "Customs and Tax law provides a duty and Goods and Services Tax (GST) free concession for certain items imported as unaccompanied personal effects provided certain requirements are met." As long as you have owned the ring for more than 12 months, you should be able to claim an exemption as an "unaccompanied personal effect". You must complete form (B534) in order for the ring to get cleared by customs. http://www.customs.gov.au/site/page5889.asp

Here's some additional info from WF regarding AUSFTA:
http://www.whiteflash.com/about-diamonds/faq/australiaunited-states-free-trade-agreement.htm

Im really sorry but I doubt very much that your going to get out of paying the GST again on your diamond.
I'm not sure if you saw/remember my post a little while back about sending my 2.12ct D over to VC to be reset but I went through all of this in detail with our Customs Dept.
Sadly it seems that 'anything' you do to the diamond while it's away 'modifies' it and therefore will cause it to attract GST on it all over again when it re enters the country. I simply wanted to drop it into a new setting, but even though I had already owned it for 6yrs and could provide all of the documentation and receipts to prove this, it was considered a 'modification' and so would attract GST again.
In the end I'm having VC make the Emylia for me with just the GIA cert/specs of the diamond and will have it set here in Sydney...not ideal I know but the only solution.

I was really lucky as I had called the Custom Dept Hotline on two separate occasions and was given the advice that if i already owned it then I wouldn't have to pay the GST again on the value of the diamond but only on the value of the new setting.
I was just about to send it off but luckily it was Victor who prompted me to get them to send me something in writing from them before I shipped it.
The official response after a few back and forth emails to them was that it was indeed a modification and therefore attracted the GST on the total value of the diamond as well all over again.
I'm guessing but if they consider setting it into a new ring a modification then I expect they would consider a total recut a modification too.

I'm really bad at linking threads on the forum but if you go through my posts you'll see the email response that they sent to me.

Every case seems to be different however and it would be still worth asking them the question again, but I'd get it in writing.
The only other thing I can think of is if you were able to say that it was a repair to the diamond? I don't know if this would make it any difference but you never know.

Good luck with this, I know it's so frustrating.

 

[TRIALnERROR]

I agree with nomissjane that you should try to clarify beforehand, but I can see how your situation could be considered different and exempt from GST. Since nomissjane purchased a new setting, she didn't technically own it for the required 12 month period to qualify as an "unaccompanied personal effect."

 

[nomissjane]

I agree with nomissjane that you should try to clarify beforehand, but I can see how your situation could be considered different and exempt from GST. Since nomissjane purchased a new setting, she didn't technically own it for the required 12 month period to qualify as an "unaccompanied personal effect."

Just on this note, I was always more than happy to pay the GST on the value of the new setting VC is making for me, I just didn't see why I needed to pay the GST as well on the value of a diamond that I had already owned for 6yrs and could show that I had already paid GST on previously.
According to advice that I was given from the Customs Dept it doesn't matter how long you owned the item for, only that when it comes back into the country it would be in a 'modified' state.
I guess you'd just have to check whether or not they considered a recut to be a modification.

If its helpful the person I contacted and spoke to at the Aust Customs Dept was Kisan Sirur (Senior Customs Officer) on 1300 558 099.

 

[Chloegal]

Thanks everyone.I will ring the tax department.

I would be surprised to hear that a pre owned diamond sent to America only for a GIA certificate would attract GST?

The recut is a repair as far as I know, especially if it is having scratches and chips polished out. But I`m not sure if the tax department would say that it is an improvement and or modificaton.

I will look into it.

 

[nomissjane]

Thanks everyone.I will ring the tax department.

I would be surprised to hear that a pre owned diamond sent to America only for a GIA certificate would attract GST?

The recut is a repair as far as I know, especially if it is having scratches and chips polished out. But I`m not sure if the tax department would say that it is an improvement and or modificaton.

I will look into it.

Good luck Chloegal, I agree that it would be a bit ridiculous to pay the GST again in those circumstances but then there's a fair bit of our Customs rules that I find surprising.

 

[Chloegal]

It is mind blowing that getting a diamond reset or set attracts GST when posted back to OZ on the previously owned diamond! Especially in the cases of the diamond being the main value with a very small percentage of total value being the setting! That`s just robbery.

 

[Chloegal]

I agree with nomissjane that you should try to clarify beforehand, but I can see how your situation could be considered different and exempt from GST. Since nomissjane purchased a new setting, she didn't technically own it for the required 12 month period to qualify as an "unaccompanied personal effect."

Just on this note, I was always more than happy to pay the GST on the value of the new setting VC is making for me, I just didn't see why I needed to pay the GST as well on the value of a diamond that I had already owned for 6yrs and could show that I had already paid GST on previously.
According to advice that I was given from the Customs Dept it doesn't matter how long you owned the item for, only that when it comes back into the country it would be in a 'modified' state.
I guess you'd just have to check whether or not they considered a recut to be a modification.

If its helpful the person I contacted and spoke to at the Aust Customs Dept was Kisan Sirur (Senior Customs Officer) on 1300 558 099.

Thanks that helps heaps!!!!

 

[Chloegal]

Thanks everyone for the help and advice so far.

Today I was told that getting my diamond graded by GIA for a report would NOT attract GST on my diamond per say. Plus even getting it recut would NOT attract GST on my diamond. But, if I failed to fill out the correct paperwork before getting the diamond to the US it would definitely attract GST when it comes back by post. A proper paper trail must be set up before I either hand deliver it or post it to BGD. (note the cost of recut or GIA if over $1000 is subject to GST).

The thing that still floors me is that their logic for charging GST on a diamond reset is crazy. First of all, the diamond is still basically in its original form, the setting being much less permanent that the diamond which is millions of years old. Perhaps if you sent some tiny diamonds and they were used in a very elaborate ring where the diamond % value was very low. But really, most settings are a fraction of the diamond cost and it is very sneaky to attempt to argue that the diamond is now in a changed form.

If this logic actually held, why dont we have to pay GST on our diamonds every time we get them reset in Australia? Plus, I thought that GST had to be 10% of an amount actually charged, not an amount insured. It seems very far fetched that in this instance there is a 10% tax on a cost base with no corresponding actual expense, just a self imposed insurance valuation. And this is in light of having proof that one did own the diamond etc before setting. Plus, the setting does not change the value of the diamond in it plus it is a temporary adornment and easy to remove the diamond.