Landed cost is the number that matters to a PNG buyer: what the goods cost once they're cleared and sitting in the warehouse. Duty and GST are a big part of it, and they're calculated in a set order on a set value. Understand that, and you can price accurately before the goods leave Australia.
This guide explains the building blocks of PNG's import taxes, how they stack, and how to estimate landed cost. For the full shipping process, see our complete guide to shipping from Australia to PNG.
Key points
- PNG import duty is set item by item in Schedule 1 of the Customs Tariff Act 1990, now based on the HS 2022 nomenclature.
- Many goods are duty-free, while others carry rates such as 15% or 25%; vehicles, alcohol and tobacco can also attract excise.
- Import GST is 10% and applies to most commercial imports.
- Values are converted into kina at the Customs exchange rate, which affects the final amount.
- GST-registered businesses can generally claim import GST back as an input tax credit.
The building blocks
| Element | What it is | Calculated on |
|---|---|---|
| Customs value | Usually the cost of the goods plus freight and insurance to PNG (CIF), converted to kina | Commercial invoice and freight documents |
| Import duty | The rate set for the goods' tariff classification | Customs value |
| Excise | An extra duty on specific goods such as vehicles, alcohol and tobacco | Customs value, at the rate for the goods |
| Import GST | 10% on most commercial imports | Customs value plus duty and excise |
| Customs entry fee | A fixed processing fee for the declaration | Per entry |
The value is converted into kina using the applicable Customs exchange rate, so currency movements between quoting and arrival change the final figure.
Finding the duty rate
PNG's import duty rates are set out in Schedule 1 of the Customs Tariff Act 1990, which PNG Customs now publishes in an HS 2022-based version. Each tariff item has its own rate. Many are listed as free, while others carry rates such as 15% or 25%. Budget amendments change individual items from time to time.
The key is correct classification. The same product can fall under different tariff items depending on what it's made of and how it's used, and the rate can differ sharply. Ask your broker to classify new products before you quote a PNG customer. Our guide to PNG customs clearance explains how classification is checked.
A worked example
Here's an illustrative example for a commercial consignment. The figures are made up to show the method, not real rates for any product.
| Step | Calculation | Amount |
|---|---|---|
| Customs value (CIF in kina) | Goods, freight and insurance, converted at the Customs rate | K20,000 |
| Import duty at 15% | K20,000 × 15% | K3,000 |
| Value for GST | K20,000 + K3,000 | K23,000 |
| Import GST at 10% | K23,000 × 10% | K2,300 |
| Customs entry fee | Fixed fee | K30 |
| Total payable to Customs | K3,000 + K2,300 + K30 | K5,330 |
PNG Customs' own published example uses the same structure for a used vehicle, with excise in place of duty: GST is charged on the customs value plus excise, and the entry fee is added at the end. For a two-litre car worth US$6,000 plus US$3,770 freight and insurance, the total payable to Customs was K11,195.71.
Vehicles are a special case because excise can run from 20% to 120% depending on engine size. See our guide to shipping a car from Australia to PNG for the full example.
From taxes to landed cost
Duty and GST are only part of landed cost. A realistic estimate includes:
- the cost of the goods
- origin charges and freight to PNG
- cargo insurance
- PNG duty, excise, GST and the entry fee
- broker fees and any NAQIA inspection or treatment
- terminal, delivery order and storage charges
- delivery to the warehouse or site.
Our guide to what shipping from Australia to PNG costs explains each of the freight and handling components, and our guide to PNG destination charges covers the charges payable after arrival.
Claiming GST back
PNG's GST works much like Australia's. Businesses whose taxable supplies exceed K250,000 in a 12-month period must register, and GST-registered businesses can generally claim the GST they pay on imports as an input tax credit, provided the goods are used for taxable business purposes. For a registered business, import GST is mostly a cash-flow cost rather than a final one.
Private individuals and unregistered businesses can't claim it back, so for them import GST is a real cost.
Exemptions and concessions
- Personal effects of people taking up residence, and of citizens returning after a year or more overseas, may enter duty-free. See moving to PNG from Australia.
- Diplomatic, aid and NGO shipments usually need a duty-free certificate from PNG's Department of Foreign Affairs.
- Major resource projects may have customs arrangements under agreements with the State. Confirm before relying on them.
- Goods covered by trade or donor arrangements may have specific treatment; your broker can advise.
Get it wrong and it costs more
Underpaying duty through a wrong value or classification can attract a penalty of 50% to 200% of the shortfall, on top of the duty itself. A careful classification up front is far cheaper.
Frequently asked questions
Is GST charged on the freight cost?
Yes. GST is calculated on the customs value, which usually includes freight and insurance to PNG, plus any duty and excise.
Where can I find the duty rate for my product?
In PNG's customs tariff, published by PNG Customs. Because classification can be complex, ask a licensed broker to confirm the tariff item.
Can I claim PNG import GST back?
If you're registered for GST in PNG and use the goods in your taxable business, you can generally claim it as an input tax credit.
Part of our complete guide
This article is one step in Shipping from Australia to PNG: The Complete Guide. Other guides in the "documents, customs, and compliance" stage:
This guide is general information, current at the date of last review. Rates, schedules, duty rates and procedures change, so confirm the details of your shipment with a licensed freight forwarder or customs broker before you act.