Qantas will no longer be able to pocket the GST portion of tickets sold to passengers who don't take their flight.
A landmark ruling by the High Court means the airline will forego an estimated $34m in revenue, representing the 10% GST added to domestic and international fares, with that money belonging to the coffers of the Australian Taxation Office.
Qantas argued that when a passenger didn't turn for their flight, the airline didn't provide a service to them – and therefore, it should be allowed to hang onto the GST component of the ticket.
''Qantas is disappointed with the High Court's decision,'' the airline said in a statement, although it noted that the decision "will have no financial impact on the Qantas Group because the relevant GST has already been paid to the tax office.''
The airline said yesterday that while it was disappointed by the High Court's decision it would have no financial impact on its balance sheet as it had already paid the $34m to the tax office.
The High Court's summary held that "flights were sold and bookings taken on the basis that Qantas would use its best endeavours to carry the passenger and baggage, having regard to the circumstances of the business operations of the airline."
"Consequently, even if the passenger did not actually travel, there was a taxable supply incurring GST liability and Qantas was liable to remit the GST received on fares for unclaimed flights to the Commissioner."
You'e on Twitter? So are we! Follow Australian Business Traveller at @AusBT.
About David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.