Shops warned over illegal GST on basic goods

The Internal Revenue Commission [IRC] has taken strong action against shops that are illegally charging Goods and Services Tax [GST] on essential household items that are zero-rated under the law.

The IRC, working together with PNG Customs and the Independent Consumer and Competition Commission [ICCC], has carried out joint inspections in several provinces across the country.

According to the IRC, inspections found many shops breaking the law in Goroka, Mt Hagen, Enga, Mendi, Vanimo, Chimbu and Jiwaka.

The results showed high levels of non-compliance. In Goroka, 15 out of 23 shops inspected were issued warnings. In Chimbu, seven of 10 shops were warned, while in Jiwaka, eight of nine shops inspected were found to be in breach. In Mt Hagen, 14 out of 20 shops were warned. In Enga, eight of 10 shops inspected received warnings. All eight shops inspected in Mendi were warned, and in Vanimo, 15 out of 16 shops inspected were found to be non-compliant.

The IRC issued warning notices and gave shops seven days to correct their pricing and systems. Follow-up inspections are now underway. Shops that fail to comply will face legal action.

The IRC said penalties include fines of up to K50,000 per offence, repayment of wrongly charged GST to customers, audits, and possible court action.

The commission clarified that prices may still change due to freight costs, fuel prices, foreign exchange rates and supply issues. However, price control and market-related matters fall under the responsibility of the ICCC.

The IRC reminded consumers that GST should not be charged on 13 essential household items that are zero-rated by law. Members of the public are encouraged to report breaches by scanning QR codes on IRC notices or by emailing gst_free_household_goods@irc.gov.pg. All reports will be treated confidentially.

The IRC warned all businesses to comply with the law immediately, saying it will continue to enforce GST laws to protect consumers