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  • Issue 1 – Travel agents' commissions for arranging overseas supplies

    Travel agents supply services to domestic travel wholesalers. The services include arranging the supply of overseas land product to a traveller. For this service they receive commission from the domestic travel wholesaler who is the supplier of the land product to the traveller.

    Note: The term 'travel agent' is not limited to registered travel agents but can cover other tourism enterprises, such as airlines, hotels and professional conference organisers, who arrange domestic and overseas travel on behalf of another person or persons.

    'Land product' includes:

    • accommodation
    • transport other than air transport (such as travel by train, car or sea)
    • car hire
    • tickets for entrance to exhibitions, entertainment events
    • other similar tourism services other than air transport.


    How is the commission received by a retail travel agent from a domestic wholesaler in respect of an overseas package treated for GST purposes?


    Where an overseas land product provider supplies overseas land products direct to a local tour operator, that supply is generally not a taxable supply, depending on the particular circumstances.

    Where the domestic wholesaler uses the services of a travel agent to arrange the sale of the overseas land product there is a supply from the travel agent to the domestic wholesaler. This supply is GST-free under section 38-360 because the travel agent makes the supply in the course of its enterprise and the effective use or enjoyment of the overseas land product takes place outside Australia. Section 38-360 is extracted for your reference.

    38-360 Travel agents arranging overseas supplies

    A supply is GST-free if:

    a. the supplier makes it in the course of *carrying on an enterprise as a travel agent

    b. it consists of arranging for the making of a supply, the effective use or enjoyment of which is to take place outside Australia.

    *denotes a defined term in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).


    Section 38-360 of the GST Act

    See also Travel agents and commissions (NAT 4518)

      Last modified: 28 Jun 2010QC 17665