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AGR JOINT VENTURE v FC of T

Members:
G Downes P
A Sweidan SM

Tribunal:
Administrative Appeals Tribunal, Perth

MEDIA NEUTRAL CITATION: [2007] AATA 1870

Decision date: 18 October 2007

Justice Downes and A Sweidan (President; Senior Member)

Summary

1. AGR Joint Venture carried on the business of refining and selling gold and silver, as well as fabricating gold and silver products, including coin blanks. It sold coin blanks to the Royal Australian Mint and Gold Corporation. The issue in this case is whether the transactions in relation to coin blanks are subject to goods and services tax on the gold or silver component of the blanks.

2. A coin blank is an unmarked flat metal disc. It is a precursor to a struck coin. Coin blanks are supplied to mints that use them to

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strike bullion coins and collectors' coins. Bullion coins are principally for investment and are tradeable at a price close to the spot price of gold or silver. Collectors' coins, or numismatic coins, are typically limited in edition and are tradeable at a price significantly above the spot price. Coin blanks themselves are not generally traded.

3. To produce coin blanks, AGR took refined gold or silver, melted it, cast it in bars, rolled the bars into strips of requisite thickness and used a blanking tool and press to punch blanks from the strips. The refined gold and silver was sourced from AGR's Perth refinery and was in both granular and cast form. It also included scrap such as strips from which coin blanks had been punched. The fabrication process took place at AGR's premises in Somerton, Victoria.

4. The relevant transactions were generally carried out as follows:

  • (a) The Mint and Gold Corp placed orders with AGR for the manufacture of coin blanks according to specifications;
  • (b) AGR issued credits, specified in grams of metal, to unallocated metal accounts of the Mint and Gold Corp. The credits were equivalent to the metal content of the coin blanks. AGR billed the Mint and Gold Corp for the metal content;
  • (c) AGR fabricated the coin blanks from its general stock of metal, none of which was owned by either the Mint or Gold Corp. AGR billed the Mint and Gold Corp for the fabrication cost; and
  • (d) AGR debited unallocated metal accounts of the Mint and Gold Corp with an amount equivalent to the metal content of the fabricated coin blanks.

5. The Commissioner of Taxation contends that each transaction constitutes a single supply of coin blanks and that AGR is liable for GST on the full value. AGR contends that there are two supplies. The first supply is the supply of a credit to the customer's metal account, which is a supply or right to the supply of precious metal. The second supply is the service of fabricating the metal into coin blanks. AGR asserts that only the fabrication service is a taxable supply on which GST is payable.

6. The crediting of a metal account is a paper transaction which does not generally involve any delivery of metal. The Commissioner says that, in the present case, such credits serve only to confirm a previous agreement regarding the price for the metal content of coin blanks (as opposed to fabrication charges). AGR contends that the credits signify a separately enforceable right to precious metal.

7. The issue between the parties is essentially whether contracts for the supply of coin blanks can be broken down into two separate supplies, the first of which is GST-free or input taxed and the second of which is taxable. The Commissioner contends that the commercial reality of the transaction is that AGR contracted to supply coin blanks, not rights to credits on a metal account plus a fabrication service.

8. For the reasons which follow we have decided that, in substance, the transactions constituted supplies of coin blanks. Although the transactions may have involved a number of steps, there was in each case only one supply. That supply attracted GST. In the alternative, we have concluded that even if there were two supplies, each supply would attract GST. The amount of GST would be the same.

Evidence

9. The documentary and oral evidence before the Tribunal described the transactions between the Mint and AGR. The steps in each transaction may be summarised as follows:

  • (a) The Mint made a "Request for Quotation" by phone or fax to AGR setting out the details of the required coin blanks (ie, gold or silver, purity, dimensions), quoting specifications by reference to numbered forms and giving quantities and delivery times.
  • (b) AGR confirmed the request by faxing a "Delivery Schedule" specifying the fabrication cost per blank, total quantity of metal needed (in grams) and price (per gram).
  • (c) The Mint faxed "Purchase Order" and "Specification" documents for each class of coin blank. Each Purchase Order specified the required coin blanks, specification numbers, quantity and delivery time as well as the required metal quantity and its price. Each Specification document corresponded with a particular specification number and detailed requirements for chemical composition, physical dimensions and other criteria including surface condition, surface roughness, edge condition, hardness, flatness, microstructure, grain size and contamination.

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    (d) AGR confirmed, by phone and fax, that the same quantity and price of metal would be credited to the Mint's unallocated metal account. It provided its banking details for payment. It enclosed with the fax a "Forward Sale Invoice" for "fine gold granule" or "fine silver granule", together with the total quantity, unit price, tax (0%) and total value. All these steps appear to have taken place in quick succession, generally in the space of a day.
  • (e) AGR commenced fabricating the coin blanks.
  • (f) AGR issued a "Sales Invoice" in the same form as the Forward Sales Invoice, including the reference to granule.
  • (g) AGR credited the Mint's unallocated metal account and issued a "Metals Received Invoice" specifying the quantity of metal and referring to "Metal credited to your Metal Account". This document also refers to "granule".
  • (h) AGR issued a second "Sales Invoice" for "fabrication coin blanking". This specified the details of the coin blanks, total quantity, unit price, tax (10%) and total value for the fabrication service.
  • (i) AGR issued a "Metals Returned Invoice" specifying the debits from the Mint's unallocated metal account for "coins fine gold" and showing "Metal debit from your metal account".

10. Steps (d) to (i) applied in much the same way for Gold Corp transactions. Instead of steps (a)-(c), Gold Corp placed an order by phone or fax. Gold Corp then sent a "Purchase Order" and "Blank Purchase Specification" (analogous to those in step (c)) for each class of coin blank.

11. Each of the invoices referred to above contained the following "Terms and Conditions of Trade":

  • "(e) Property in the goods supplied by AGRJV to the Purchaser does not pass to the Purchaser until the Purchaser has paid all money owing to AGRJV, whether owing in respect of those goods supplied or any other goods supplied or on any other account whatsoever and whether or not presently due and payable.

  • …

  • (g) The Purchaser agrees, until such time as property in the goods passes to the Purchaser to hold the goods as fiduciary bailee for AGRV. Until the Purchaser has paid all money owing to AGRJV, AGRJV has the right at its option, to either call for or recover the goods supplied and the Purchaser is obliged to deliver up the goods supplied if so directed by AGRJV. This does not affect the Purchaser's obligations to purchase the goods. The Purchaser irrevocably authorizes AGRJV at any time to inspect the goods and/or to reclaim possession of the goods in accordance with this clause if the Purchaser has breached this agreement or any agreement with AGRJV relating to the supply of and payment for those goods. The Purchaser agrees that it will at all times store the goods with AGRJV's distinctive identifying mark attached so that the goods are immediately distinguishable from any other of the Purchaser's stock."

12. During the relevant period (1 July 2000 to 30 September 2002) AGR collected GST in respect of the fabrication cost of coin blanks, but did not collect GST for the value of the metal content of the coin blanks. The total value of the metal content was $33,574,448, consisting of:

  • (a) $6,499,879 for gold coin blanks supplied to the Mint;
  • (b) $5,033,178 for silver coin blanks supplied to the Mint; and
  • (c) $22,041,391 for silver coin blanks supplied to Gold Corp.

13. One of AGR's witnesses was Richard Hayes. He was the Finance Director of AGR. Mr Hayes accepted that the steps and documentation summarised in paragraph 9 represented a typical transaction for the supply of coin blanks. He accepted that the metal price

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specified in the Delivery Schedule represented the agreed price for the metal content of the coin blanks which was fixed at the time of making an order.

14. The Forward Sales Invoices and Sales Invoices refer to gold and silver granules. Nowhere do they refer to gold or silver per se, or gold or silver bars. David Wood was another witness for AGR. He was AGR's information technology manager. He co-developed AGR's computer system that was used to control and record stock. He said: "in the system, any order made to purchase a quantity of gold that was to be credited to a metal account was [recorded as granule]… This was a nominal code used in the system for all such transactions". Nevertheless, the contractual documents which passed between the parties specified granules. Moreover, the use of a nominal or default code identifying granules can hardly justify reading the entry as referring to something else.

15. Another of AGR's witnesses was Gerard Metcalfe. During the relevant period he was AGR's Treasury Manager, Risk. Both Mr Hayes and Mr Metcalfe gave evidence that when AGR credited unallocated metal accounts of the Mint or Gold Corp it would then procure additional credits pursuant to a so-called "lease" in order to balance AGR's books. The use of such metal "leases" was a risk management tool that was employed to manage AGR's own exposure to fluctuations in the price of metal. The "lessor" was either Gold Corp or a bullion bank.

16. Neither the Mint nor Gold Corp ever made a claim to receive physical metal. At all times it was anticipated that the credits in unallocated metal accounts would be offset by equivalent debits at the time of coin blank fabrication.

17. Mr Sean Russo, who gave evidence as an independent expert witness for the Commissioner and who is a former Managing Director of Rothchilds Treasury Division, testified that unallocated metal accounts are merely a set of ledger entries which record unsecured entitlements of account holders as against the general assets of the account operator. Mr Russo's report states at 6:

"In relation to the fabrication it is my understanding and experience that the common practise is that the purchase of fabricated products is done by setting the price of the metal content by way of a sale of metal that is recorded as an unallocated metal balance. The product is then manufactured from the general pool of metal available to the refiner…

When the product is ready for delivery, the purchaser's claim on metal in the unallocated account is effectively surrendered as payment for the physical product. In this sense it has always been my understanding that the creation of an unallocated account balance is simply to remove the ongoing price risk in relation to a proposed purchase of product. The timing of the transaction is set to either remove the purchaser's price risk in advance of the date of delivery; or, to remove the fabricator's payment risk on the customer by effectively receiving the dollar based payment for the metal content of the product in advance of manufacturing the product."

18. If this is correct, there is no physical metal which can be held by an account holder of unallocated metal credits. The purpose of AGR and its customers in engaging in unallocated account transactions was to confirm and formally evidence the "locking in" of the price of the metal content of the blanks. Nevertheless, AGR says that its customers could have called for physical metal, representing their unallocated account credits, and that affects the way GST is attracted to the transactions.

Statutory framework

19. GST is payable on "taxable supplies" (s 7-1 A New Tax System (Goods and Services Tax) Act 1999(Cth)). A taxable supply arises if there is a supply for consideration in the course of an enterprise and the supply is not GST-free or input taxed (s 9-5).

20. Section 9-10 relevantly defines "supply" as follows:

  • "(1) A supply is any form of supply whatsoever.
  • (2) Without limiting subsection (1), supply includes any of these:
    • (a) a supply of goods;
    • (b) a supply of services;

    • …

    • ATC 2696

      (e) a creation, grant, transfer, assignment or surrender of any right;

    • …

    • (h) any combination of any 2 or more of the matters referred to in paragraphs (a) to (g)."

21. Section 9-30 deals with supplies that are GST-free or input taxed:

  • "(1) A supply is GST-free if:
    • (a) it is GST-free under Division 38 or under a provision of another Act; or
    • (b) it is a supply of a right to receive a supply that would be GST-free under paragraph (a).
  • (2) A supply is input taxed if:
    • (a) it is input taxed under Division 40 or under a provision of another Act; or
    • (b) it is a supply of a right to receive a supply that would be input taxed under paragraph (a)."

22. Division 38 includes s 38-385:

"A supply of precious metal is GST-free if:

  • (a) it is the first supply of that precious metal after its refining by, or on behalf of, the supplier; and
  • (b) the entity that refined the precious metal is a refiner of precious metal; and
  • (c) the recipient of the supply is a dealer in precious metal.
Note: Any other supply of precious metal is input taxed under section 40-100."

23. The relevant provision in Division 40 is s 40-100:

"A supply of precious metal is input taxed."

24. "Precious metal" is relevantly defined in s 195-1 as:

  • "(a) gold (in an investment form) of at least 99.5% fineness; or
  • (b) silver (in an investment form) of at least 99.9% fineness."

Previous dealings with the Commissioner

25. Although not directly relevant to our findings, we note that prior to the relevant period and in anticipation of the commencement of the GST Act on 1 July 2000, AGR made the following request to the Commissioner for a private ruling:

"The situation we require addressing can be outlined as follows:

  • 1. AGR provides refined metals in the form of granules and coin blanks to the Western Australian Mint ("WAM") and the Royal Australian Mint ("the Mint"). The granules and coin blanks will be used in the production of input taxed precious metal products for the purposes of the GST Act;
  • 2. The precious metal granules and coin blanks meet the requirements of purity and fineness as outlined in the definition of "precious metal" set out in Section 195-1 of the GST Act;
  • 3. However, as the legislation presently stands, the precious metal granules and coin blanks are not in an investment form and will therefore be taxable for the purposes of the GST regime.
  • 4. AGR request confirmation from the Commissioner of Taxation that in stipulated circumstances the supply of precious metal granules and coin blanks would fulfil the requirements of investment form for the purposes of the definition in Section 195-1 and would be supplies of precious metal in accordance with the requirements of the GST Act…"

26. The request then set out a suggested process for the supply of granules and coin blanks that allegedly satisfied the GST definition of "precious metal". The process in each case included supplying the granules or coin blanks in sealed containers which were "in standard weights and stamped with the hallmark of the refiner that is accepted as a recognised international hallmark".

27. On 14 July 2000, the Commissioner issued a Private Ruling advising:

  • "(a) The supply of precious metals are either GST-free or input taxed. Gold granules, however, are not considered to be a precious metal for the purposes of the GST legislation and therefore will be subject to GST. Furthermore the supply of the granules in the manner you propose does not change their status.
  • (b) The supply of precious metals are either GST-free or input taxed. Blank coins, however, are not considered to be a precious metal for the purposes of the GST legislation and therefore will be subject to GST. Furthermore, the supply of the blank coins in the manner you propose does not change their status."

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28. On 15 November 2002, the Commissioner wrote to AGR. He enclosed a position paper on the GST treatment of supplies of coin blanks and requested full details of all coin blank transactions. The position paper contained the following statement:

"3. The ATO's position is that the contract entered into for the supply of coin blanks is one of a single taxable supply. The ATO does not accept that the contract is capable of being split into taxable and non-taxable components. What follows is the ATO's view of metal accounts, their operation and what they are capable of representing. This view has been arrived at after extensive industry research and analysis and through consultation with many participants in the gold industry…"

29. On 16 April 2004, the Commissioner sent AGR a draft audit report which confirmed the Commissioner's conclusions in the 2000 Private Ruling.

30. On 13 August 2004, the Commissioner sent AGR a Compliance Activity Report which advised that the audit during the relevant period had been completed. The Commissioner maintained that coin blanks were not "precious metal" as defined in s 195-1 of the GST Act and therefore the supply of coin blanks was a taxable supply. The Commissioner issued Notices of Assessment that advised of shortfall amounts totalling $3,357,445.

Issues

31. There are two issues before us:

  • (a) Does each transaction for the supply of coin blanks constitute a single taxable supply or two supplies, only the second of which is taxable, where the first supply is the supply of credit to the customer's metal account and the second supply is the service of fabricating the metal into coin blanks?
  • (b) If each transaction consists of two separate supplies, is the supply of credit to the customer's unallocated metal account a supply or right to the supply of precious metal for the purposes of s 9-30 and ss 38-385 or 40-100 of the GST Act?

General principles

32. GST is a practical business tax (
Sterling Guardian Pty Ltd v Commissioner of Taxation 2005 ATC 4796; (2005) 220 ALR 550 at 562-563). We must interpret the GST Act in a practical and commonsense way and, accordingly, avoid interpretations which are unduly technical or overly meticulous and literal (
Saga Holidays Ltd v Commissioner of Taxation 2006 ATC 4001; (2006) 64 ATR 602 at 619).

33. There are a number of useful UK authorities in relation to Value Added Tax. The European Court of Justice, on reference of a question of law from the House of Lords, stated: "Where the transaction in question comprises a bundle of features and acts, regard must first be had to all the circumstances in which that transaction takes place. In this respect… the essential features of the transaction must be ascertained in order to determine whether the taxable person is supplying the customer, being a typical consumer, with several distinct principal services or with a single service" (
Card Protection Plan v Customs & Excise Commissioners [1999] 2 AC 601 at 626-627).

34. In ascertaining whether a transaction should be regarded as several distinct supplies as opposed to one composite supply, it is necessary to consider the true and substantial nature of the consideration given in return for the payments (
Customs & Excise Commissioners v Wellington Private Hospital Ltd [1997] STC 445 at 462). "[The] fact that separate charges are identified in a contract or on an invoice does not on a consideration of all the circumstances necessarily prevent the various supplies from constituting one composite transaction nor does it prevent one supply from being ancillary to another supply" (
Customs & Excise Commissioners v British Telecommunications [1999] WLR 1376 at 1383). Similarly "…although the existence of a single price or separate prices is a relevant factor, it should not be treated as determinative. The court should have regard to the commercial reality of the transaction. If two or more distinct elements in the supply can be discerned, it needs to be asked whether or not one or more can be seen as ancillary to a principal element

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or elements"
Sea Containers Ltd v Customs & Excise Commissioners [2000] STC 82 at 88).

Is there one supply or two?

35. AGR structured its transactions in the manner set out above long before the introduction of GST. There is no suggestion that it did so to avoid GST. AGR says this shows there were two genuine supplies. The Commissioner says that the parties were engaging in hedging transactions to protect against fluctuations in the price of the metal. This is why the price of metal was "locked in" at the time each customer lodged an order.

36. AGR says that the transactions involved, as a "significant element… [that] is not merely incidental", the "supply of the right to precious metal (in the form of London Good Delivery bars) on metal account". It says that the supply of the credit was "physically and economically dissociable" from the supply of the fabrication service.

37. This case is ultimately one of characterisation. The question is whether there is one or two supplies in terms of s 9-5 of the Act. Answering the question requires attention to ss 9-5 and 9-10. Do the facts of each of the transactions in this matter show one supply or two?

38. Although the question of whether property in goods passes will often be relevant and sometimes determinative, that will not always be so. The creation of a right can be a supply (s 9-10(2)(e)) just as much as a supply of goods (s 9-10(2)(a)).

39. In the present case, AGR seeks to rely upon the creation of rights associated with the grant of credits in unallocated metal accounts as the source of a supply. The question is whether, for the purposes of the Act, the totality of the facts disclose one transaction or two. The essence of the transactions between the parties was undoubtedly the delivery of coin blanks. There is no suggestion that either the Mint or Gold Corp established unallocated metal accounts on their own, independently of orders for coin blanks. When we examine the nature of the transactions, they seem to us to be transactions for the supply of blanks which are carried out through a series of steps, rather than a series of independent steps which incidentally result in the supply of blanks. We accept that this alone does not lead to the characterisation of a series of steps as one supply. We can readily imagine situations in which one transaction involves more than one supply. However, in our opinion, that is not the case here.

40. What is critical to our findings is that the real purpose for the dealing and all its steps is the supply of blanks. The fact that there is no physical delivery of metal, nor any allocation of metal, nor even an enforceable contractual right to identified metal until the blanks are made are factors to take into account. The fact that no credit in an unallocated account arose except in connection with a supply of blanks is also relevant. So is the fact that the immediate benefit from using an unallocated metal account credit is the fixing of the price of the blanks at the time of contract.

41. We accept that the dealings are capable of being characterised as the supply of a bundle of rights, including the crediting of a metal account, followed by the fabrication of metal into blanks. However, that does not mean that there are two supplies. To say that there are two supplies is, in our opinion, to create an artificial splitting of the transaction. The effect of the GST legislation on the dealings is not simply determined by identifying their precise legal character. The question is how they should be characterised for GST purposes. This involves an analysis of the nature of the dealings as much as a technical legal analysis.

42. Part of AGR's case is the assertion that the Mint and Gold Corp, as holders of credits on unallocated accounts, have an entitlement to physical metal, probably in the form of London good delivery bars. London good delivery bars are a precisely defined form of bar well known in the London bullion market. In our opinion the evidence does not establish the claim. Although we have much evidence before us about the London bullion market, there is nothing to show that that was the basis upon which the parties dealt. We say more about this later.

43. The strongest piece of evidence in favour of AGR's claims is the terms of metal account statements issued by AGR to the Mint and Gold Corp. The statements record balances of gold and silver in grams and show the totals as "owing to you" or "owing to us". Although these entries do record debits in grams of metal,

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we do not think, in the face of the other evidence, that they show that the Mint or Gold Corp had the right to call for physical metal.

44. In any event, this issue does not seem to us to be determinative although it is relevant. Even if there was a right to call for physical metal our opinion would not change. It is not appropriate to characterise a transaction for GST purposes by reference to a possible incident of the transaction which is not part of its essence.

45. As part of our task of characterising the transactions for GST liability, we must address practical considerations. In this regard it should be noted that the metal used for fabrication was apparently mostly in the form of granules or scrap. The granules were unmarked beads of metal and the scrap was largely metal left over from previous pressings. It would be impossible to "allocate" this metal even if the parties had intended this to happen. To the extent that it is said that the customers could have called for metal, even though they did not, we think the suggestion contains an air of unreality. If a call had been made for the supply of actual metal, AGR would have been surprised to say the least. No doubt a great deal of negotiation would have been necessary relating to whether, and how, the call would be satisfied.

46. Another relevant factual matter is that because the coins were pressed from sheets, more metal than was used in the coins needed to be put into the manufacturing process. This does not sit well with the argument that by acquiring the amount of metal to be used in the blanks, the Mint and Gold Corp acquired a right to the precise quantity of metal needed for the manufacturing process. If the Mint and Gold Corp had called for and been given bars before the manufacturing process began, more gold would still have had to go into the manufacturing process, although excess metal would have been returned at the end.

47. Some associated issues were dealt with in
Tennant Ltd v McVeigh (Unreported, Federal Court of Australia, Sackville J, 23 June 1995),
North Flinders Mines Ltd v Conn (1995) 123 FLR 330 and
Re Goldcorp Exchange Ltd (In Receivership) [1995] 1 AC 74. These decisions establish that until there is a physical allocation by way of segregation of metal, the holder of credits on an unallocated metal account has no proprietary interest in metal. The holder merely has an unsecured entitlement to receive metal. AGR contends, in reliance on the "lease" agreements, that it was the intention of the parties that coin blanks were to be manufactured from metal to which its customers had a right. It says that, legally, there is either a loan or a bailment sui generis. However, "[it] makes no difference what the parties intended if what they intend is impossible" (Goldcorpat 90).

48. The totality of these considerations leads us to the conclusion that the present transactions involved one supply in each case, namely, the supply of coin blanks and did not involve two supplies, namely the supply of a right to gold or silver, or to call for gold or silver to be allocated, followed by the supply of the service of fabricating the metal into coin blanks. There may be other ways the claim to two supplies might be formulated, but, however formulated, we think that the transactions under consideration amounted to one supply in each case.

49. To characterise the present transactions as one supply does not, however, conclude our task. The next question is what GST consequences flow from the characterisation. In many cases it would not matter whether there was one supply or two. We have ultimately concluded that it does not matter in the present case.

Is there a supply of precious metal?

50. Supplies of what are called precious metals in the Act may be either GST-free or input taxed. In both cases, the supply attracts no GST. In the former the supplier is entitled to claim input tax credits and in the latter it is not. It would be wrong, however, to think that "precious metal" has its ordinary meaning. It is defined in s 195-1 to mean "gold (in an investment form) of at least 99.5% fineness [and] silver (in an investment form) of at least 99.9% fineness". There is no issue in this matter about fineness. However, there is an issue about whether the transactions related to gold or silver "in an investment form". The phrase is not defined. However, the parties accept that gold or silver is not in investment form unless it is hallmarked or otherwise marked in a recognised fashion which identifies and guarantees its fineness and quality. A

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statement of weight may also be required. Both parties agree that coin blanks are not in investment form and sales of blanks are neither GST-free nor input taxed. Nor are granules or scrap.

51. AGR argues that the contractual rights of the Mint and Gold Corp, and their entitlements as holders of credits in unallocated metal accounts, entitled them to call for delivery of gold and silver bars in investment form, which has the consequence that what it claims to be the first supply is a supply of precious metal. Such a supply will either be GST-free or input taxed.

52. Even if we had decided that there were two supplies, this submission contains a number of inherent and independently fatal flaws. We have already referred to the fact that the invoices issued by AGR identify the subject metal as granules. Granules cannot be precious metal. Making out a right to call for gold in the form of gold bars, which would be in investment form, depends upon implication and international custom and practice. To this end there was much evidence before us about the London bullion market. However, we are not satisfied that the creation of a gold account between AGR and its customers in conjunction with a proposed delivery of coin blanks (when the agreement suggests that the gold to be used is granules and there is no express right to call for the supply of gold bars) gave rise to any right to call for the delivery of gold bars in investment form. There is simply no basis for imputing the trading terms employed in the London bullion market or any similar terms to the present dealings. It follows that there was neither a supply nor a right to supply of gold in investment form. We recognise that we have not here addressed silver. That is because virtually all of the evidence before us relating to metal accounts and international trading in metals related to gold. Although one might anticipate that international trading in silver has its differences, we understand that we were asked to deal with the evidence on the basis that the position of gold and silver were no different.

53. To succeed in this part of its case, AGR must show not only that there was a supply of gold or silver, but that it was a supply of gold or silver in investment form. We have already decided that there was no supply of gold or silver either physically or by reason of a right to call for metal. If we are wrong, we find, in the alternative, that there was no supply or right to supply of gold or silver in investment form. We arrive at this conclusion on the basis that there was no direct contractual right, nor any basis for implying any right, to London good delivery bars or some other source of gold in investment form and on the basis of our analysis of the true nature of the transactions.

Decision

54. The decisions under review will be affirmed. We reach this decision on the basis that in each transaction there was one supply of coin blanks. Alternatively, if there were two supplies, both of them were subject to GST. The result is the same.


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