GST And The Carbon Pollution Reduction Scheme

The Carbon Pollution Reduction Scheme (CPRS) is a hot topic at the moment and is being widely covered in the Australian media. The finalisation of the Scheme is subject to various draft bills and legislation being passed through Parliament.

The basic framework is clear:

• An eligible emissions unit must be surrendered for each tonne of greenhouse gas emissions that an entity is responsible for in a particular year.

• Eligible units include Australian Emissions Units and Eligible International Emissions Units.

• The number of Australian Emissions Units issued in a given year will be capped and will represent Australia's emission target for that particular year.

Lobbying to convince the Government that CPRS transactions should either be GST free, or have special concessions to remove the cash flow effects on businesses and to minimise their compliance costs, has not been successful. The Government's view is that special GST treatment for CPRS activities