New laws will hit PNG gas with GST

FOR the first time, all gas and other energy sources imported into Australia via pipelines will face GST charges under proposed changes to the Australian Customs legislation.



Oil Search's Kutubu oilfield in PNG.

The new legislation, expected to be in place by the middle of this year, comes in response to the proposed PNG pipeline project, according to law firm MinterEllison.

Under current legislation, pipeline importers do not have to specify the intended purpose of the product, and are therefore not subject to GST.

But the changes mean that all gas imported via pipelines gas will be subject to a customs reporting regime, as with goods imported by air and sea. The GST liability can be passed under contract from the importer to either the buyer or seller of the product.

But MinterEllison warned that the proposed legislative changes could mean the increased costs are dumped on the business and domestic users of the imported gas.

"These new charges mean users will pay more for imported gas than gas produced domestically," a MinterEllison spokesperson told EnergyReview.net.

The spokesperson added that news of the legislation changes had seemingly been kept quiet within the sector.

"Everyone in the industry seems to know about these changes – it's those outside of it that don't," the spokesperson said.

"We wanted to make sure those trying to negotiate contracts are aware of the new costs."

The first draft of the new legislation is expected to be introduced into the Federal Parliament in the autumn sitting and would become law by mid-2006, the law firm said.

EnergyReview.net

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