• Tourism and Hospitality - common GST technical questions and answers

    • This archived document was created in February 2001 as guidance for taxpayers dealing with GST issues in the Tourism & Hospitality industry.
    • The questions and answers contained in this archived document are for reference purposes only and cannot be relied upon as the current ATO view.

    (a) added, (u) updated, (w) withdrawn

    Issue Number

    Index

    Date

    1

    Registration

    1.1

    Turnover

    09/02/01

    1.2

    Turnover of agent

    09/02/01

    2

    Accounting issues

    2.1

    Tax Invoices - input tax credits

    09/02/01

    2.2

    Tax invoices - petrol

    09/02/01

    2.3

    Tax invoices - credit card sales

    09/02/01

    2.4

    Tax invoices - date of issue

    19/02/01 (a)

    2.5

    Averaging sales

    19/02/01 (u)

    2.6

    Accruals (non-cash) accounting

    19/02/01 (u)

    2.7

    Input tax credits - reimbursement of staff expenses

    19/02/01 (u)

    3

    Hospitality - including restaurants, cafes, registered clubs, hotels, non-profit organisations

    3.1

    Principle of mutuality

    09/02/01

    3.2

    Community support

    09/02/01

    3.3

    Non-profit organisation

    09/02/01

    3.4

    Free services

    09/02/01

    3.5

    Input tax credits - restaurants, cafés and caterers

    09/02/01

    3.6

    Food premises registration

    27/07/01 (u)

    4

    Arranging international and domestic travel

    4.1

    Travel agents' commissions

    09/02/01

    4.2

    Commissions during the transitional period

    09/02/01

    4.3

    Travel agent's commission on overseas land content

    09/02/01

    4.4

    Excess baggage

    09/02/01

    4.5

    Domestic and international air travel

    09/02/01

    4.6

    Stopovers

    09/02/01

    4.7

    Domestic travel bookings over the Internet

    09/02/01

    4.8

    Forfeited deposits - international travel

    09/02/01

    4.9

    Cancellation fees for international flights

    09/02/01

    4.10

    Non refundable tickets

    01/05/01 (u)

    4.11

    Domestic air travel

    09/02/01

    4.12

    Domestic air travel over 30 June 2000 period

    09/02/01

    4.13

    Domestic flight changes

    09/02/01

    4.14

    Frequent flyer points

    09/02/01

    4.15

    Airport landing fees

    27/07/01 (u)

    4.16

    What is the GST treatment of the following ticket fees and charges?

    19/06/01 (a)

    4.17

    Travel agent fee for arranging a visa

    27/07/01 (a)

    4.18

    Cancelled Airline Travel

    26/09/01 (a)

    5

    Tourist refunds etc

    5.1

    Tourist Refund Scheme

    09/02/01

    5.2

    Goods and services consumed in Australia by overseas visitors

    09/02/01

    5.3

    Foreign exchange dealings

    09/02/01

    6

    Tourist accommodation

    6.1

    Commercial accommodation

    09/02/01

    6.2

    Commercial residential premises

    09/02/01

    6.3

    Commercial / residential premises - holiday units

    09/02/01

    6.4

    Predominantly long term accommodation - caravan park sites

    27/07/01 (u)

    6.5

    Long term stay premises

    27/07/01 (u)

    6.6

    Cruise ships, houseboats, home stays

    09/02/01

    6.7

    Home stays

    09/02/01

    6.8

    Farm stays

    09/02/01

    6.9

    School excursions accommodation

    09/02/01

    6.10

    Sale of commercial property

    09/02/01

    6.11

    Vouchers (accommodation)

    09/02/01

    6.12

    Vouchers (other)

    09/02/01

    7

    Caravan Parks and Camping Grounds

    7.1

    Definition

    01/05/01 (a)

    7.2

    Retirement villages / nursing homes in caravan parks

    27/07/01 (u)

    7.3

    Rental

    01/05/01 (a)

    7.4

    Commercial accommodation

    01/05/01 (a)

    7.5

    Commercial accommodation concessions

    01/05/01 (a)

    7.6

    Continuity requirement in commercial residential premises

    01/05/01 (a)

    7.7

    28 days calculation

    01/05/01 (a)

    7.8

    70% calculation for "predominantly for long-term accommodation"

    01/05/01 (a)

    7.9

    Marina Berths

    01/05/01 (a)

    8

    FBT and GST

    8.1

    Employer provided accommodation

    27/07/01 (u)

    8.2

    Meals supplied to staff

    27/07/01 (u)

    8.3

    Food given to staff

    27/07/01 (u)

    9

    Wine Equalisation Tax (WET) and Excise

    09/02/01

    9.1

    Wine Equalisation Tax (WET)

    09/02/01

    9.2

    Excise on alcoholic drinks not subject to the WET

    09/02/01

    9.3

    Diesel and other fuels

    09/02/01

    10

    Miscellaneous

    10.1

    Vending machine sales

    09/02/01

    10.2

    Pricing issues

    09/02/01

    This document was created in February 2001 as guidance for taxpayers dealing with GST issues in the Tourism & Hospitality industry.

    The questions and answers contained in this archived document are for reference purposes only and cannot be relied upon as the current ATO view.

    Section 1 - Registration

    1.1 Turnover

    Q: My Bed & Breakfast (B & B) business turnover last year was $40,000. What happens if I take more than $50,000 in the next financial year, and I haven't registered?

    A: You should read the answer to question 6.2 in relation to commercial residential premises, as it is possible that you do not satisfy the relevant criteria. If your B&B is not commercial residential premises, you will not need to register for and charge GST. Input taxed supplies are not included in the calculation of turnover, even if your B&B turnover exceeds the $50,000 threshold.

    If your B&B does qualify as commercial residential premises, it is required to register if it is carrying on an enterprise and it has a current or projected annual turnover that is:

    • $50,000 or more for profit making enterprises, or
    • $100,000 or more for non-profit bodies.

    The B&B entity must apply for registration within 21 days after becoming required to be registered.

    Current turnover is the value of all your supplies for the previous 11 months plus the current month. Projected turnover is the value of all supplies for the current month plus an estimate for the next 11 months.

    It is important to note that turnover (not profit) includes the turnover from all the enterprises that an entity carries on. For example, if you operate a B & B with a small gift shop, you (the entity) will need to take into consideration the annual turnover of both the enterprises. This applies equally to a situation where a farmer may also have a farm stay operation.

    If your turnover is close to the $50,000 threshold, you will need to monitor your annual turnover on a monthly basis.

    1.2 Turnover of agent

    Q: As a travel agent, is my turnover based on my total ticket sales, or my commission?

    A: Annual turnover is based on the value of all supplies you have made in relation to your business. As a travel agent selling on commission only, your turnover threshold will be based on the value of the commissions received.

    Section 2 - Accounting issues

    2.1 Tax Invoices - input tax credits

    Q: I shop for my business inputs, such as fresh foods, and also paper goods and cleaning agents at the local supermarket. How do I get my GST Input Tax Credit?

    A: The GST legislation requires that, if the price of the taxable supply is $55 or more, a Tax Invoice must be issued by the supplier within 28 days after the recipient requests it.

    For taxable supplies less than $55 supermarkets have advised that taxable supplies will be identified on the receipt. Whilst it is not necessary to hold tax invoices for amounts less than $55 you must have some form of documentary evidence to support all input tax credit claims. For more information on Tax Invoices, see Goods and Services Tax Ruling GSTR 2000/17External Link, "Goods and Services Tax: Tax Invoices".

    2.2 Tax invoices - petrol

    Q: Being in the country, petrol is purchased at a variety of petrol stations. If Tax Invoices are only required for purchases $55 or over, how do I calculate the GST component and how do I calculate a portion of this as private use?

    A: The amount of input tax credit for a creditable acquisition depends upon the amount of GST payable on the supply of the thing acquired. Therefore, to claim any input tax credit, you must hold appropriate documentation. For expenses greater than $55, you will need to hold a tax invoice.

    There will be many expenses under $55 for which a tax invoice may not be available, the most common being petrol. In these cases, receipts and diary entries are acceptable documentation of the expense incurred. The amount of input tax credit available on a creditable acquisition is 1/11th of its cost. However, the amount of input tax credit you can actually claim will depend upon your extent of creditable purpose.

    More information is contained in Goods and Services Tax Bulletin GSTB 2000/2External Link "How to claim input tax credits for car expenses"

    2.3 Tax invoices - credit card sales

    Q: When an airline ticket is purchased using a credit card, the travel agent sends the credit card number to the airline. The airline then processes the credit card transaction, ie the travel agent does not receive the credit payment and then pass the money on to the airlines. Can the travel agent issue a tax invoice or does the invoice need to issue from the airline?

    A: If a taxable supply is made through an agent a tax invoice can be issued by the principal or the agent. However the principal and the agent must not both issue separate tax invoices relating to the same supply. Goods and Services Tax Ruling GSTR 2000/17External Link "Goods and Services Tax: Tax Invoices" deals with this issue.

    2.4 Tax invoices - date of issue

    Q: Tax Invoices - do they actually need the date of issue, as details supplied to a client usually show the dates the stay commenced and ended, (date of arrival and date of departure) and not the date of issue?

    A: Under Regulation 29.70.01 of A New Tax System (Goods and Services) Regulations 1999, a valid tax invoice must have a date of issue.

    Some accommodation providers issue invoices with a date of arrival and date of departure. The Australian Taxation Office (ATO) acknowledges that in the majority of cases the date of issue of the invoice will be the same as the date of departure. However this is not always the case.

    As an interim measure, (up to 30 June 2001) the ATO, for GST purposes, will accept the date of departure as the date of issue, provided the tax invoice contains the following wording:-

    "unless otherwise specified, in this tax invoice, the date of issue is the date of departure".

    It is a condition of using the above wording that the requirements of Regulation 29-70.01 be met from 01 July 2001.

    In regard to the above it is relevant to keep in mind that a recipient can claim an input tax credit only if a valid tax invoice is held.

    Goods and Services Tax Ruling 2000/17, (GSTR 2000/17External Link) "Goods and Services Tax : tax invoices", deals with all the requirements of a valid tax invoice.

    2.5 Averaging sales

    Q: Can I average sales of GST-free and taxable sales through my food shop?

    A: Yes. Details are contained in the booklet "Simplified Accounting Methods for Food Retailers", and a number of other specialist publications. The following publications have been produced by the ATO to assist retailers in accounting for their GST liabilities:

    1. Booklets

    2. Fact Sheets

    They can all be accessed through the web site at www.ato.gov.au or by requesting a copy on the ATO infoline 13 24 78. If you would like to read any of those booklets now, simply click on its title and you will be taken to it.

    2.6 Accruals (non-cash) accounting

    Q: My club accounts on an accruals basis. Do I need to account for GST at the time I issue a membership renewal reminder?

    A: No. A reminder notice is not an invoice. It is an invitation to renew a membership, not a document notifying an obligation to make a payment. The member may choose not to renew the membership without incurring any penalty. The GST will be payable in the tax period in which the membership is actually renewed.

    2.7 Input tax credits - reimbursements of staff expenses

    Q: How do we claim an input tax credit for uniforms purchased by our staff, where they are reimbursed?

    A: Staff uniforms and personal safety equipment are subject to GST. If these goods are purchased by you as the employer, you will be able to claim input tax credits for the GST paid on the goods.

    If these goods are purchased by your employees, there is no entitlement by the employee for input tax credits for the GST paid on the goods. However employees could still claim a tax deduction in their personal income tax return, subject to the income tax rules governing deductions for uniforms.

    You are entitled to input tax credits for reimbursements you make to employees for uniform or other expenses they incur that are directly related to their activities as your employee. The employee must obtain a tax invoice when the goods and services are purchased and pass it on to you.

    Section 3 - Hospitality - Restaurants, Cafés, Registered Clubs, Hotels and Non-profit organisations

    3.1 Principle of mutuality

    Q: How does the principle of mutuality (ie an entity cannot make a profit from dealing with itself) affect GST on membership fees?

    A: For income tax purposes, the principle of mutuality says that you cannot make a profit from dealing with yourself. The net profit of a registered or licensed club arising from receipts from its members is therefore not liable to income tax.

    While the principle of mutuality may be relevant in determining what constitutes income, it has no effect when determining whether a taxable supply has been made by an entity registered for GST. Therefore, GST will apply to membership fees where the entity charging the membership fees is registered or required to be registered.

    3.2 Community support

    Q: How is 'community support (donations and sponsorships) treated?

    A: Donations
    A donation in the form of a payment, in cash or kind, that is made unconditionally is not subject to GST because no benefits or rights flow as a result of the payment and the recipient does not have to use the donation for a particular purpose.

    Unconditional grants and unconditional sponsorships are also not subject to GST for similar reasons.

    Sponsorships
    Clubs and hotels commonly sponsor local community groups and sporting teams, and make donations to community groups and charities. Amounts paid for sponsorship fees are usually payment for services (for example, advertising for a sponsor) and will be subject to GST if the sponsored entity is registered for GST.

    Monetary sponsorship
    If the organisation supplying the service (such as advertising for a sponsor) is registered for GST, the organisation paying the sponsorship fee will be entitled to an input tax credit of 1/11th of the payment.

    If the entity supplying the services is registered it will be liable to pay GST on the supply.

    Further details are given in the GST booklet "Registered pubs, clubs and hotels and The New Tax System" - <span class="withdrawntext">WITHDRAWN</span>.

    3.3 Non-profit organisation

    Q: What is the definition of non-profit for the $100,000 turnover threshold?

    A: For an organisation to qualify as a non-profit organisation, it should meet two requirements. The organisation should have a written constitution and the constitution ought to prohibit a distribution of profits and assets amongst members during the lifetime of the organisation and on its winding-up. The prohibition of distributing profits and assets is where the notion of a 'non-profit' organisation comes from. However, being non-profit does not mean that it is exempt from paying income tax.

    3.4 Free services

    Q: Are free services (eg a free bus service) subject to GST?

    A: If you supply a free service to your guests you will not need to account for GST. For example, if you provide free bus transport to and from the airport, you will not need to account for GST on the service.

    If registered for GST, you will be able to claim any input tax credits associated with the service, eg servicing the bus.

    3.5 Input tax credits - restaurants, cafés and caterers

    Q: I am a sole trader and run a café. I sometimes take food from the café home to prepare meals for my family. What are the GST implications?

    A: Many foodstuffs are GST-free, so there are no implications for GST. However, if you have purchased food for use in your café that is not GST-free (eg caviar, cakes or pastries) and you take it home, you will have to make an increasing adjustment in your next Business Activity Statement (BAS). The amount of adjustment you need to make is the amount of input tax credit you have claimed in respect of the purchase.

    The reason for this is that you originally acquired the food solely for a creditable purpose, but the use later changed. Of course, if the acquisition of the taxable food occurs in the same tax period in which you take it home, as will almost always be the case, you can simply reduce the amount of input tax credit you claim in respect of that acquisition when preparing your BAS.

    3.6 Food premises registration

    Q: Local Councils are presently sending accounts for Food Premises Registration for the following twelve months. Are these fees a GST taxed service? It doesn't show on the account.

    A: The registration fee may not be subject to GST under the ‘A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2001External Link’ "" ('The Treasurer's Determination').

    The fees and charges that are not subject to GST under the Treasurer's Determination vary between states and territories:

    • In New South Wales, Licence Fees for food vendors and Fees for Occupying Council Footways under the NSW Local Government Act 1993 are included in the Determination as being GST-free.
    • In Victoria, registration of food vehicles, and registration of food preparation premises under the Victorian Food (Miscellaneous) (Fees) Regulations 1994 are included in the Determination as being GST-free.
    • In Queensland, fees for licences and registrations to ensure the enforcement of the food hygiene regulations under the Food (Miscellaneous) (Fees) Regulations 1994, and pedestrian malls licences and permits under the Local laws and supplementary local laws made under the:
      • City of Brisbane Act 1924 and Local Government Act 1993
      • Local Government (Queen Street Mall) Act 1981
      • Local Government (Chinatown and The Valley Malls) Act 1984
       

    are included in the Determination as being GST-free.

    • In Western Australia, Rottnest Island Eating House Licences and Registrations under the Rottnest Island Authority Act 1987 and Health (Rottnest Island) By-laws 1989 are included in the Determination as being GST-free.
    • In South Australia, Fees for any authorisation, licence, or permit granted by a council as per section 188 (1) (e) or (f) of the Local Government Act 1999 are included in the Determination as being GST-free.
    • In Tasmania, application fee to grant or transfer licence for business premises or a temporary food premises fee under the Tasmanian Local Government Act 1993 are included in the Determination as being GST-free.
    • In the Australian Capital Territory, an application fee for a food business licence, a licence renewal fee and an application fee for approval to alter a food premises under the ACT Food Act 1992 are included in the Determination as being GST-free.
    • In the Northern Territory, an annual registration fee for a Boarding House/Eating House under the Public Health (Shops, Eating Houses, Boarding House, Hostels and Hotels) Regulations, permits to be a mall/market stallholder or for shopkeeper trestles, permits for side-walk cafes, and permits for mobile food vans under the NT Local Government Act are included in the Determination as being GST-free.

    If your invoice is not clear and you are in doubt as to whether or not you have been charged GST for these services, contact your local authority.

    Section 4 - Arranging international and domestic travel

    4.1 Travel agents' commissions

    Q: Are travel agents' commissions included in the definition of 'arranging' transport?

    A: Yes, travel agents' commissions fall within the term "arranging" transport. Commissions you receive for selling taxable services, such as domestic tours or accommodation, will be subject to GST.

    GST is not payable on commissions you receive as part of arranging:

    • the transport of passengers to, from or outside Australia;
    • the transport of passengers on domestic legs of international flights;
    • the domestic air transport of a non-resident passenger where the supply was purchased while the passenger was outside Australia; or
    • the domestic transport of a passenger by sea where the transport is part of a journey by sea
      • from Australia to a destination outside Australia; or
      • from a destination outside Australia to Australia; and
      • the transport is provided by the supplier who transports the passenger to or from Australia
       

    4.2 Commissions during the transitional period

    Q: If I sell a ticket in June 2000 for an event that will occur in July 2000, but I receive my commission in June 2000, do I have to account for GST on my commission?

    A: No. Your liability to account for GST is based on the time when the 'supply' occurred. In this case, the supply (the service you provided as a travel agent) occurred before 1st July 2000, therefore is not subject to the GST.

    4.3 Travel agents' commission on overseas land content

    Q I am a travel agent and I sell overseas travel packages, which include, hotel accommodation, car hire, rail passes, theatre and theme park tickets. Is the commission I receive for the sale of the overseas land content subject to GST?

    A As the effective use or enjoyment of the hotel accommodation etc is taking place outside of Australia and you are conducting an enterprise as a travel agent the commission charged will be GST-free in accordance with Section 38-360 of A New Tax System (Goods and Services Tax) Act 1999.

    4.4 Excess baggage

    Q: Are 'excess baggage' charges in relation to the GST-free transport of a passenger also GST-free?

    A: Yes. The transportation of the passenger's baggage is an integral part of the supply of transportation to the passenger. The 'excess baggage' charge does not constitute a separate supply.

    'Excess baggage' charges on GST-free flights are covered by either Items 1, 2, or 3 of Section 38-355.

    4.5 Domestic and international air travel

    Q: As a travel agent, I sell some domestic air travel and some international air travel. How does this affect my claim for input tax credits?

    A: You are entitled to claim input tax credits on both categories of sale, that is those on which GST is payable and those that are GST-free.

    4.6 Stopovers

    Q: How long a stopover is allowed between domestic and international legs of an air trip?

    A: There is no limit on the length of a stopover as long as the two legs of the flight are part of the same arrangement or itinerary, or the domestic travel forms part of a ticket for international travel, or was cross-referenced to such a ticket.

    4.7 Domestic travel bookings over the Internet

    Q: When someone books domestic air travel over the Internet and pays via a credit card, it is very hard to prove that they are a non-resident. What do we do besides asking them?

    A: The ATO is considering proposals put forward by the industry as to how to confirm the fact that the proposed passenger is a non-resident and is not in Australia when the supply was purchased.

    The ATO would expect that the internet sales site would obtain the following details from the purchaser in the form of a statement or certification:

    • passport number of the proposed passenger;
    • the nationality of the proposed passenger; and
    • confirmation that the proposed passenger is currently outside Australia.

    4.8 Forfeited deposits - international travel

    Q: If an agent takes a deposit for an international flight, and the deposit is forfeited, is it still a cost of 'arranging transport' and therefore GST-free?

    A: The agent has fulfilled their commitments in arranging the transport, therefore even if the deposit is forfeited it is still GST-free.

    4.9 Cancellation fees for international flights

    Q: If a cancellation fee is charged to cancel a GST-free international flight, is the cancellation fees subject to GST?

    A: This service is not to arrange GST-free travel. Therefore GST will apply to this fee.

    4.10 Non-refundable tickets

    Q: Is the GST refunded to the client if they do not travel after purchasing a non-refundable ticket ?

    A: No. A sale of a ticket of passenger transport is the sale of a right to utilise that transport, such as the right to a seat on a plane, ship etc. Where the recipient of the supply (the intending passenger) does not take up the transport for whatever reason, the right to travel on the flight, ship etc has not been changed or taken away from the recipient. Therefore, for GST purposes, there has been no adjustment event. The supplier is still liable to account for GST on the supply of the ticket.

    4.11 Domestic air travel

    Q: What is the definition of domestic air travel. Does it include

    1. charter flights;
      1. scenic flights, hot air ballooning trips, etc.;
       

    if they are all part of the international holiday package?

    A: Domestic air travel is not defined in the GST Law. The transport of a passenger within Australia by air is GST-free, but only if:

    the passenger is a non-resident; and

    the supply was purchased while the passenger was outside Australia.

    The term "transport" is given its ordinary meaning. "Transport" is defined in the Macquarie Concise Dictionary as "to carry or convey from one place to another". Travel is similarly defined as "to go from one place to another". Therefore a derived definition for domestic air travel is "to convey the passenger from one place to another (different) place".

    Applying this to the examples given:

    • if the charter flight conveys the passenger from one place to another place it would be GST-free if the conditions above are met;
    • the substance of the supply by operators of scenic flights, hot air ballooning operators etc, is not the transport of a person from one destination to another, but rather to provide a tourism service eg to view the surrounding scenery from a hot air balloon. The transport of the person is merely incidental to the principal purpose, namely the tourism service. GST is payable on these services, even if purchased outside Australia.

    4.12 Domestic air travel over 30 June 2000 period

    Q: If I sell a domestic tour (airfare only), that is paid for on 21st June 2000, commences on 28th June 2000 and finishes on 4th July 2000, how do I calculate the GST?

    A: The value of the flights taken prior to 1 July 2000, will not be subject to GST, but the value of the flights taken after 1 July 2000 will be subject to GST.

    For example, the following itinerary explains how to calculate the GST payable:

    28 June 2000
    29 June 2000
    30 June 2000

    Flight: Bankstown Airport to Dubbo
    Flight: Dubbo to Cobar
    Flight: Cobar to Broken Hill

    Not subject to GST
    Not subject to GST
    Not subject to GST

    1 July 2000
    2 July 2000
    3 July 2000
    4 July 2000

    Flight: Broken Hill to Mildura
    Flight: Mildura to Albury
    Flight: Albury to Wagga Wagga
    Flight: Wagga Wagga to Bankstown

    Taxable
    Taxable
    Taxable
    Taxable

    4.13 Domestic flight changes

    Q: If I sell a ticket for domestic air travel before 1st July 2000, but due to changed circumstances, the customer cannot fly until after 1st July 2000, am I now required to account for GST on the price of the ticket?

    A: A sale of a ticket is the sale of a right to a seat on a plane, where there is a reasonable expectation that that right will be exercised on or after 1 July 2000, the ticket will be subject to GST. Where there is a change in circumstances that results in the customer travelling after 1 July 2000, GST will apply.

    In practice it would be advisable in these circumstances to cancel the original ticket and re-book the flight for a GST inclusive price.

    4.14 Frequent flyer points

    Q: How does GST affect travel booked using frequent flyer points?

    A: Press release Nat 00/14 issued 1 March 2000, states in part "The accrual and conversion or redemption of points by members into goods or services will not be subject to GST."

    4.15 Airport landing fees

    Q: Is GST applied to airport landing fees?

    A: The Treasurer published a determination of the taxes, fees and charges that will not be subject to GST -A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2001External Link . Schedule 1 of the Determination does not contain any references to charges for landing at airports, other than Aircraft Landing Fees (fees for approval of landing areas within Gold Coast waterways) under the Gold Coast Waterways By-Law as continued under the Transport Infrastructure Act 1994.

    Therefore, all other airport landing fees are subject to GST. Please find below a complete list of all the aircraft related taxes, fees and charges that have been ruled to be not subject to GST in that Determination:

    Schedule 1 Australian taxes, fees or charges (section 4)

    Part 1 Commonwealth

    TRANSPORT AND REGIONAL SERVICES

    Item Australian tax, fee or charge Australian law

    Airport charges

    13.1

    Aircraft noise levy

    Aircraft Noise Levy Act 1995

    13.2

    Charges for air transport regulatory services

    Air Navigation (Charges) Act 1952

    13.3

    Fees for building control approvals

    Airports Act 1996, paragraphs 100 (1) (d) and 107 (1) (d)

    13.4

    Fees associated with environmental regulation

    Airports Act 1996, subsection 132 (3B)

    13.5

    Land tax equivalents imposed on airport lessees

    Airports Act 1996

    Aviation charges

    13.51

    Application fee to conduct international air charter operations

    Air Navigation Regulations 1947, regulation 149

    Civil Aviation Safety Authority

    13.52

    Fee for assessment of application for the issue or renewal of a certificate of airworthiness or an export certificate of airworthiness

    Civil Aviation (Fees) Regulations

    13.53

    Fee for processing of application for validation of a foreign certificate of airworthiness or a foreign export certificate of airworthiness

    Civil Aviation (Fees) Regulations

    13.54

    Fee for assessment of application for the issue of a certificate of type approval

    Civil Aviation (Fees) Regulations

    13.55

    Fee for assessment of application for accreditation of a synthetic flight trainer

    Civil Aviation (Fees) Regulations

    13.56

    Fee for assessment of application for the issue, renewal or variation of a certificate of approval

    Civil Aviation (Fees) Regulations

    13.57

    Fee for assessment of training course conducted by an organisation under a certificate of approval

    Civil Aviation (Fees) Regulations

    13.58

    Fee for assessment of application for approval of aircraft component, or repair, or design of a modification, of an aircraft or aircraft component

    Civil Aviation (Fees) Regulations

    13.59

    Fee for assessment of application for approval of a system of maintenance or maintenance control manual, or approval of a variation of a system of maintenance or maintenance control manual

    Civil Aviation (Fees) Regulations

    13.60

    Fee for assessment of application for approval or variation of a maintenance schedule for an aircraft

    Civil Aviation (Fees) Regulations

    13.61

    Fee for assessment of application for approval of a permissible unserviceability or a minimum equipment list

    Civil Aviation (Fees) Regulations

    13.62

    Fee for assessment of application for certification of maintenance for aircraft operations overseas

    Civil Aviation (Fees) Regulations

    13.63

    Fee for metallurgical examination or investigation of a defective component

    Civil Aviation (Fees) Regulations

    13.64

    Fee for assessment of application for the issue of an aerodrome licence

    Civil Aviation (Fees) Regulations

    13.65

    Fee for annual obstacle survey at request of aerodrome licence holder

    Civil Aviation (Fees) Regulations

    13.66

    Fee for assessment of application for the issue, renewal or variation of an air operator's certificate

    Civil Aviation (Fees) Regulations

    13.67

    Fee for assessment of application for the issue, renewal or variation of an airworthiness authority

    Civil Aviation (Fees) Regulations

    13.68

    Fee for assessment of application for the issue, renewal or variation of an aircraft welding authority

    Civil Aviation (Fees) Regulations

    13.69

    Fee for assessment of application for the issue of an aircraft maintenance engineer licence

    Civil Aviation (Fees) Regulations

    13.70

    Fee for assessment of application for the renewal or re-issue of an aircraft maintenance engineer licence

    Civil Aviation (Fees) Regulations

    13.71

    Fee for assessment of application for the issue of category, group or type endorsement on an aircraft maintenance engineer licence (first and each additional endorsement)

    Civil Aviation (Fees) Regulations

    13.72

    Fee for assessment of application for the combined issue of private pilot licence and flight radiotelephone operator licence

    Civil Aviation (Fees) Regulations

    13.73

    Fee for assessment of application for the combined issue of commercial pilot licence and flight radiotelephone operator licence

    Civil Aviation (Fees) Regulations

    13.74

    Fee for assessment of application for the combined issue of air transport pilot licence and flight radiotelephone operator licence

    Civil Aviation (Fees) Regulations

    13.75

    Fee for processing of an application for the issue of flight engineer licence

    Civil Aviation (Fees) Regulations

    13.76

    Fee for processing of application for the issue of certificate of validation for private and commercial operations, including additional fee for rating and aircraft endorsements

    Civil Aviation (Fees) Regulations

    13.77

    Fee for processing of application for the issue of a special pilot licence

    Civil Aviation (Fees) Regulations

    13.78

    Fee for processing of application for the issue or renewal of flight crew rating

    Civil Aviation (Fees) Regulations

    13.79

    Fee for assessment of application for the issue of aircraft endorsement on a flight crew licence per endorsement

    Civil Aviation (Fees) Regulations

    13.80

    Fee per endorsement for assessment of application for the issue of aircraft endorsement on the basis of an overseas endorsement

    Civil Aviation (Fees) Regulations

    13.81

    Fee for preparing or approving a flight manual, part of a flight manual, or an alteration of a flight manual

    Civil Aviation (Fees) Regulations

    13.82

    Excise and customs duty on aviation gasoline (avgas) and aviation kerosene (avtur)

    Aviation Fuel Revenues (Special Appropriation) Act 1988
    Excise Tariff Act 1921
    Customs Tariff Act 1995

    Airservices Australia

    13.87

    Charges for air navigational services on international flights

    Air Services Act 1995

    Part 2 New South Wales

    Item Australian tax, fee or charge Australian law Notes

    LORD HOWE ISLAND BOARD

    7.14

    Airport Passenger Levy

    Lord Howe Island Act 1953

    Levy paid by passengers for arriving on the island via an aircraft

    AIR TRANSPORT COUNCIL

    24.1

    Air licence fees

    Air Transport Act 1964

    These are air licence fees payable for Regular Public Transport licences, and are calculated at a rate of 0.2% of gross passenger revenue, as part of the regulatory framework for the provision of intrastate air passenger services

    24.2

    Licence application fee

    Air Transport Act 1964

    These fees are payable by all categories of air transport licences, as part of the regulatory framework for the provision of intrastate air passenger services

    Part 4 Queensland

    Item

    Australian tax, fee or charge

    Australian law

    Notes

    20.21

    Aircraft Landing Fees

    Gold Coast Waterways By-law as continued under the Transport Infrastructure Act 1994

    Fees for approval of landing areas within Gold Coast waterways

    4.16 What is the GST treatment of the following ticket fees and charges?

      Type of Fee Domestic Ticket (GST Applies) Domestic Ticket (GST- Free)1 International Ticket (GST-Free)

    4.9 of the Q & A

    Cancellation fee - flight

    GST

    GST

    GST

      

    Cancellation penalty - flight

    GST

    GST

    GST

    4.8 of the Q & A

    Forfeited deposit

    GST

    GST-Free

    GST-Free

      

    Lost ticket indemnity service fee

    GST

    GST-Free

    GST-Free

      

    Refund service fee

    GST

    GST-Free

    GST-Free

    53 of the Issue R

    Re-issue fee

    GST

    GST-Free

    GST-Free

      

    Re-booking fee

    GST

    GST-Free

    GST-Free

      

    Re-validation fee

    GST

    GST-Free

    GST-Free

    52 of the Issue R

    Prepaid ticket advice service fee

    GST

    GST-Free

    GST-Free

    54 of the Issue R

    Passenger movement charges2

    N/A

    N/A

    Not subject to GST

    54 of the Issue R

    Aircraft noise levy3

    See below

    Not subject to GST

    Not subject to GST

    54 of the Issue R

    Head taxes

    GST

    GST-Free

    GST-Free

    1 GST is applied to all domestic air travel purchased in Australia, with the following exception:

    • Where a domestic flight forms part of a ticket for international travel or is cross-referenced to an international ticket and is purchased at any time up to and including the date of international travel; or
    • The domestic air ticket was purchased while the non-resident was outside Australia.

    2 The Passenger movement charge is not subject to GST under A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2000 (No. 3). It is the personal liability of each passenger. The charge relates to international transport only.

    3 Aircraft noise levy is not subject to GST when charged by the authority to the airline under Treasurer's Determination 2000 (No. 3). Where the airline includes the Aircraft noise levy charge as part of the airfare, it then takes on the character of the airfare and as such forms part of the price of the airfare. Therefore, the aircraft noise levy component that is on-charged in a taxable flight ticket will have GST included in it.

    4.17 Travel agent fee for arranging a visa

    "Q. Where a supplier who is carrying on an enterprise as a travel agent charges a passenger travelling from Australia a fee for arranging the processing of that passenger's visa application to travel outside Australia, is the charge by the travel agent GST free?

    A Yes. A fee charged by a supplier carrying on an enterprise as a travel agent for arranging the processing of a passenger's visa application to travel from Australia is GST-free. This is because the use or enjoyment of the supply is to take place outside Australia. A "visa" is essentially an endorsement made by an authorised representative of a country upon the passport of a citizen of another country, testifying that the passport has been examined and found in order, and permitting passage to the country making the endorsement. The travel agent is effectively arranging for the international travel of the passenger. Arranging for the issue of the passenger's visa is an essential and fundamental component of arranging the passenger's travel outside Australia.

    4.18 Cancelled Airline Travel

    What are the GST consequences of purchasing domestic flights from an airline that cannot supply the transport and there is no prospect that the tickets will be honoured by the airline or any other airline?

    Where the purchaser is an individual consumer:

    Airline customers who have paid for domestic flights which are subsequently cancelled, can seek a refund of the ticket price, from the relevant airline or credit card supplier. The GST is in the final price charged by the airline for the supply of the flight, and if the supply is not made, it is a contractual matter between the airline and the customer. Any refund made to the consumer includes GST.

    The Commissioner of Taxation has no power to pay customers of any entity a refund of GST included in the price of goods and services they have purchased but have not been supplied.

    In respect of businesses which ARE NOT registered for GST:

    Businesses that are not registered for GST are in the same situation as individual consumers, except they would be entitled to an income tax deduction for any unrefunded GST inclusive amount pertaining to business expenses.

    In respect of businesses which ARE registered for GST:

    GST registered businesses may also be able to obtain refunds from the relevant airline or from credit card suppliers.

    The collapse of a GST registered business may mean that certain supplies have no prospect of being made. This has the effect of cancelling these supplies and therefore triggers an adjustment event for both the collapsed business and the GST-registered businesses that have already paid for but not yet received supplies.

    The net effect of the adjustments is that no GST will be retained by the ATO, on any cancelled supplies.

    In the context of an airline collapse, this means that:

    • GST-registered businesses which have paid the airline for cancelled supplies are not entitled to a GST credit and should not claim credits if they are sure the supply will not be made regardless of whether they have received an adjustment note. If they have already claimed a GST credit on a Business Activity Statement (BAS) they will need to make an increasing adjustment.
    • The adjustment will need to be made in the tax period they become certain of the cancellation whether or not they have received an adjustment note. (Goods and Services Tax Ruling GSTR 2000/1 - Goods and Services Tax: adjustment notesExternal Link paragraph 12).
    • The airline should make a decreasing GST adjustment where it has already remitted GST to the ATO in respect of supplies which were cancelled to get back the GST paid.
    • GST-registered businesses would need to be sure, before making adjustments, that the supply will not be made, for example by a ticket being honoured by another carrier.
    • GST-registered businesses would also be able to claim an income tax deduction for any unrefunded GST-inclusive amount because they are not entitled to claim a credit.

    Note:

    The Australian Taxation Office has issued Media Release NAT 01/77 on this issue.

    Section 5 - Tourist refunds etc

    5.1 Tourist Refund Scheme

    Q: What are the details of the Tourist Refund Scheme?

    A: The Tourist Refund Scheme enables travellers departing Australia to claim a refund of the Goods and Services Tax and Wine Equalisation Tax payable on goods bought in Australia. The refund only applies to goods which travellers take with them as hand luggage when leaving the country. It does not apply to services or goods consumed or partly consumed in Australia. Unlike other tourist shopping schemes, travellers can use the goods before leaving Australia.

    The Tourist Refund Scheme is available to all overseas visitors and Australian residents, except air and sea operating crew.

    The refund is payable on goods costing $300 or more, bought from the same store no earlier than 30 days before leaving Australia. The tax invoice from any store must total at least $300. Refunds are available at the international airport of departure by:

    • cash (less than $200);
    • cheque;
    • credit to an Australian bank account; or
    • payment to a credit card.

    For more information or a copy of a pamphlet containing full details of the Tourist Refund Scheme contact the Australian Customs Service:

    5.2 Goods and services consumed in Australia by overseas visitors

    Q: If an international visitor purchases tourism products in Australia, are they able to make any claim back on the GST paid?

    A: There is no refund for GST included in the price of goods and services consumed in Australia. For example meals, hotel accommodation and rail or coach travel.

    Under Division 168 of the GST Act - the Tourist Refund Scheme - tourists may be entitled to a refund of all or some of the GST included in the price of goods they purchased in Australia and take home with them as hand baggage.

    Details of the Tourist Refund Scheme are available from the Australian Customs Service at www.customs.gov.auExternal Link.

    5.3 Foreign exchange dealings and travellers cheques

    Q: Are foreign exchange dealings and travellers cheques input taxed?

    A: A foreign currency transaction is a financial supply under item 9 of subregulation 40-5.09(3) of the GST Regulations. Some examples are travellers cheques and foreign currency in cash form or drafts.

    Dealing in Foreign currency and travellers cheques itself is not subject to GST as it is input taxed.

    The GST implications for the fee or commission charged on travellers cheques and foreign currency transactions will depend on whether you are acting as a principal or an agent as follows:

    As a principal:

    No GST is payable on the commission or fee when you buy or sell travellers cheques or foreign currency and you are acting in your own right, and not as an agent on behalf of someone else. This is because you are a financial supply provider and have a direct interest in the financial supply.

    As an agent: If you buy or sell travellers cheques or exchange foreign currency on behalf of someone else, and are acting as an agent, GST is payable on the fee or commission you receive for those agency services. This is because you are a financial supply facilitator and are making a taxable supply.

    Section 6 - Tourist accommodation

    6.1 Commercial accommodation

    Q: What is included in the definition of Commercial Accommodation?

    A: Commercial accommodation means the right to occupy the whole or any part of commercial residential premises, and includes (if provided as part of the right to occupy) the supply of cleaning and maintenance, electricity, gas, air-conditioning or heating, as well as telephone, television, radio or similar things. This definition can be found at Section 87-15 of the GST Act.

    It does not include food, drinks, laundry and service charges.

    A Goods and Services Tax Ruling, GSTR 2000/20External Link "Goods and Services Tax: commercial residential premises" refers to the definition of "commercial accommodation" at paragraph 159. This Ruling discusses various types of accommodation and is available on the web site.

    6.2 Commercial residential premises

    Q: What is the difference between residential premises and commercial residential premises?

    A: Goods and Services Tax Ruling, GSTR 2000/20External Link "Goods and Services Tax: commercial residential premises" addresses this issue.

    Section 195 of the GST Act provides the definition of commercial residential premises. Commercial residential premises means:

    (a) a hotel, motel, inn, hostel or boarding house; or
    (b) premises used to provide accommodation in connection with a school; or
    (c) a ship that is mainly let out on hire in the ordinary course of a business of letting ships out on hire; or
    (d) a ship that is mainly used for entertainment or transport in the ordinary course of a business of providing ships for entertainment or transport; or
    (da) a marina at which one or more of the berths are occupied, or are to be occupied, by ships used as residences; or
    (e) a caravan park or a camping ground; or
    (f) anything similar to residential premises described in paragraphs (a) to (e).
    End of example

    However, it does not include premises to the extent that they are used to provide accommodation to students in connection with an education institution that is not a school.

    The main characteristics of commercial residential premises are:

    (i) Commercial intention: The establishment is operated on a commercial basis;
    (ii) Multiple occupancy: The establishment provides sleeping accommodation on a multiple occupancy basis;
    (iii) Holding out to the public: The establishment holds itself out as premises that will receive travellers who are willing and able to pay for accommodation;
    (iv) Accommodation is the main purpose: The provision of accommodation is the establishment's primary purpose, or one of its main purposes, after the service of food and/or drink;
    (v) Central management: The establishment has central management to accept reservations, allocate rooms, receive payments and arrange the services provided throughout the premises
    (vi) Management offers accommodation in its own right: The management has control of the premises as a whole, whether or not they own the property or any part of it and lets them in its own right, rather than as an agent;
    (vii) Services offered to guests: periodic cleaning, provision of food, laundering services, telephone (allowing the guest to be billed for calls made), and minor services, like wake-up calls or taxi bookings;
    (viii) Status of guests: Those being provided with accommodation are guests, boarders or lodgers. Guests or lodgers can expect a reasonable amount of privacy from management, their staff and other guests, but not to the same level expected by a tenant.

    End of example

    More detail can be found in part two of Goods and Services Tax Ruling GSTR 2000/20External Link "Goods and Services Tax: commercial residential premises".

    Residential premises is defined in the GST Act as land or a building that is occupied as a residence, or is intended to be occupied, and is capable of being occupied, as a residence, and includes a floating home. Common physical characteristics of residential premises that provide accommodation are that they:

    • Provide occupants with sleeping accommodation and at least some basic facilities for day to day living;
    • May be in any form, including detached buildings, semidetached buildings, strata-title apartments, single rooms or suites of rooms within larger premises.

    For a detailed discussion of residential premises see part one of Goods and Services Tax Ruling GSTR 2000/20External Link referred to above.

    6.3 Commercial / residential premises - holiday units

    Q: Does a holiday unit fit within the definition of commercial residential premises; ie is a holiday unit 'similar to' a hotel, motel, hostel, boarding house, caravan park or camping ground'?

    A: Some holiday units may fall within the definition of commercial residential premises, if they are operated in a similar manner to a hotel. If the holiday units display characteristics referred to in the answer in question 6.2 (above), they are most likely commercial residential premises.

    The supply of a holiday unit by an owner to a central management entity operating a hotel will be a supply of residential premises. When the unit is aggregated by the central management entity with other units and let to the public it will then usually constitute a supply of commercial residential premises.

    Privately owned premises that may be supplied for holiday accommodation will not usually fall into this category. Holiday homes and apartments that you purchase to use personally, lend to friends/or family, or let out when not in use are residential premises.

    However, strata and other separately titled residential premises retain their character as residential premises when sold and are input taxed, regardless of whether they are located within the precincts of commercial residential premises. The only exception to this is the sale of new residential premises (other than those used for residential accommodation before 2 December 1998), which are excluded from input taxing. (See paragraph 54 of Goods and Services Tax Ruling GSTR 2000/20External Link.) The meaning of new residential premises is set out in section 40-75 of the GST Act.

    For a discussion of the meaning of residential premises see part one of Goods and Services Tax Ruling GSTR 2000/20External Link (paragraphs 16 to 61).

    6.4 Predominantly long term accommodation - caravan park sites

    Q: I operate a caravan park. Are sites permanently leased by customers whose vans are kept on site, subject to GST under the long-term accommodation rules?

    A: The long term accommodation rules apply to the provision of accommodation, including accommodation provided in caravan parks, for long term stays. Long term stays for the purposes of the GST Act are those that are for 28 days or more.

    To work out the number of days in the period for which an individual is provided with commercial accommodation:

    (a) count the day on which he or she is first provided with the commercial accommodation; and
    (b) disregard the day on which he or she ceases to be provided with commercial accommodation.

    End of example

    With your long-term stays you have a choice on how to apply the GST. Your choice depends on whether you provide predominantly long-term accommodation or not. A further alternative is to treat such long-term accommodation as residential rental under Division 40. If you make a choice to not use the concessional treatment in Division 87 the long-term stays must be input taxed under Division 40.

    Predominantly long-term accommodation for the purposes of the GST Act applies where 70% or more of your bookings of long-term sites for individuals are made for a continuous period of 28 days or more.

    If your park or camping ground is for predominantly long-term accommodation you can choose to:

    • charge GST on a reduced value (that is, 50% of the GST inclusive price of the long-term accommodation) for the supply of accommodation for the guests' entire stay; or
    • treat all of these supplies as input taxed in the same way as residential rent.

    If less than 70% of your bookings of long-term sites for individuals are made for a continuous period of 28 days or more you do not provide predominantly long-term accommodation.

    If your park or camping ground is not predominantly for long-term accommodation you can choose to:

    • charge GST on:
      • the full value of the supply for the first 27 days of continuous accommodation of long-term guests; plus
      • a reduced value (that is, 50% of the GST inclusive price of the long-term accommodation) from the 28th day of the stay; or
       
    • treat all of these supplies as input taxed in the same way as residential rent.

    For information on how GST affects caravan parks and camping grounds, including how to calculate whether or not you provide long term accommodation, see Goods and Services Tax Bulletin GSTB 2001/2External Link "Accommodation in caravan parks and camping grounds".

    6.5 Long term stay premises

    Q: How will 'predominantly long term stay premises' be determined. Is the calculation based on the number of occupants who are long term stay, the number of rooms or the number of nights of long term stay?

    A: You provide predominantly long-term accommodation if at least 70% of your stays are for a continuous period of 28 days or more.

    Paragraphs 150 to 154 of Goods and Services Tax Ruling GSTR 2000/20External Link "Goods and Services Tax: commercial residential premises" provide examples of methods that could be used to determine if your premises provides 'predominantly long-term accommodation'. One of the following methods or a combination of both may assist you in calculating occupancy:-

    • the actual occupancy of your premises for the twelve months preceding the month for which the booking is made; or
    • your projected occupancy for the twelve months following the month in which the booking is made.

    If it is inappropriate to use either of these methods, you may adopt a reasonable alternative.

    When looking at actual or projected occupancy, examine the number of supplies of accommodation, or the number of bookings that are for 28 days or more, rather than the number of people in each room. You may include bookings made by corporate entities for individuals, provided each individual stays for 28 days or more.

    Where there are two or more individuals sharing a room, who are charged separately you may count each of them in calculating the 70% figure. This may occur where rooms are booked on an independent twin/share basis or, if you operate dormitory style commercial residential premises, such as a Youth Hostel.

    You should also see Goods and Services Tax Bulletin GSTB 2001/2External Link, "Accommodation in caravan parks and camping grounds".

    6.6 Cruise ships, houseboats, home stays

    Q: Does commercial residential premises include cruise ships, house boats, homestays

    A: Cruise ships: Yes. Cruise ships fall under paragraph (d) of the definition of commercial residential premises set out in 6.2. The special treatment for long term stays (28 days or more) applies to accommodation offered on ships used for entertainment or transport, such as cruise ships.

    House boats: Usually yes, unless they are 'floating homes'. Floating homes, by their definition, are structures composed of a floating platform and a building, designed to be occupied as a residence, that is permanently affixed to the platform. It does not include any structure that has means of, or is capable of being readily adapted for, self-propulsion. Houseboats, by contrast, are generally self-propelled and therefore fall under the category of 'ships'. Commercial residential premises can include ships that are let out for hire in the ordinary course of a business of letting ships out for hire, or providing ships for entertainment or transport.

    Home stays: Usually no. Home-stays, where guests have the use of a private home, are not ordinarily commercial residential premises. They do not display the important characteristics of commercial residential premises such as multiple occupancy and/or commercial intention (referred to in 6.2). You should refer to paragraphs 122 to 128 of Goods and Services Tax Ruling GSTR 2000/20External Link "Goods and Services Tax: commercial residential premises".

    6.7 Home stays

    Q: If an Australian organising company arranges home stays, who pays the GST, the home owner or the organising company?

    A: In relation to home stays, home stays in residential premises will usually have the same treatment as residential rent and be input taxed. Therefore no GST is charged on the rental and no input tax credits are available. As in the answer to question 6.6 above, generally a home stay provider does not display the characteristics referred to in the answer to question 6.2 (above) and discussed in paragraphs 122 to 128 of Goods and Services Tax Ruling GSTR 2000/20External Link "Goods and Services Tax: commercial residential premises".

    The Australian organising company is providing a taxable supply connected with Australia to the overseas client (in arranging for a home stay to be made available in Australia). Providing the Australian organising company is registered or required to be registered, their service or supply will be subject to GST. It is the responsibility of the Australian organising company to make payment of the GST in relation to the supply.

    6.8 Farm stays

    Q: Do I need to aggregate the income from my farm business and my farm stay business when I calculate my turnover?

    A: Turnover (not profit) includes the turnover of all the enterprises that an entity carries on. For example, if the same entity operates a caravan park with a small restaurant and shop, you (the entity) will need to take into consideration the annual turnover of all the enterprises. This applies equally to a situation where a farmer may have a bed and breakfast or a farm stay operation.

    However, if the farm stay is not commercial residential accommodation, then it would be considered to be an input taxed supply. Input taxed supplies are not taken into consideration when calculating turnover. See the answer to question 6.2 for details of how to determine whether the farm stay is commercial residential premises. See also the discussion provided at paragraphs 122 to 128 of Goods and Services Tax Ruling GSTR 2000/20External Link referred to above

    6.9 School excursions accommodation

    Q: Do I charge GST on the accommodation component of school group excursions?

    A: If you are the accommodation provider and are registered or required to be registered, you will include GST in the total price for the accommodation, regardless of whether the charge is made to the school or separately to each guest.

    If the school excursion qualifies as GST-free, the school will claim input tax credits for the GST charged to it by the accommodation provider. The subsequent charge to the student by the school will be GST-free.

    6.10 Sale of commercial property

    Q: What is the GST effect if I sell my Bed & Breakfast (B&B) property?

    A: If a B&B business is sold as a going concern, the sale of the business may be GST-free. In order for the sale of the business to be GST-free,

    • the supply must be for consideration; and
    • the purchaser must be registered or required to be registered for GST; and
    • the seller and the purchaser have agreed in writing that the supply is of a going concern.

    A supply of a going concern is a supply under an arrangement which:

    • the seller supplies to the purchaser all of the things that are necessary for the continued operation of the B&B; and
    • the seller carries on, or will carry on, the B&B until the day of the sale.

    However, if you sell commercial residential premises only, then the following rules will apply. That is:

    • if you are selling premises that were in existence at 2 December 1998, no GST is payable, because the sale is treated as an input taxed supply;
    • if you are selling premises constructed since 2 December 1998, where the premises have previously been sold (GST has been paid on a previous sale) and you are registered or required to be registered for GST, the sale will be an input taxed supply;
    • if you are selling premises constructed since 2 December 1998, where the premises have not previously been sold and you are registered or required to be registered for GST, the sale will be a taxable supply;
    • if you are selling premises constructed since 1 July 2000, where the premises have not previously been sold and you are not registered nor required to be registered for GST, the sale will not be subject to GST.

    Sometimes a B&B may be considered commercial residential premises. Refer to the answer to question 6.2 (above) to determine whether your B&B is commercial residential premises.

    Generally speaking, GST applies to the sale of all commercial property sold by a registered business. The seller must include GST in the selling price of the property unless the seller is eligible for and chooses to use the margin scheme.

    If the buyer is registered for GST the buyer may be able to obtain an input tax credit for the GST included in the purchase price of the property. If the buyer is not registered or will use the property to make input taxed supplies, or has acquired the property under the margin scheme, no input tax credits will be available.

    6.11 Vouchers (accommodation)

    Q: What is the treatment of accommodation vouchers?

    A: GST treatment varies according to the type of voucher sold:

    • a voucher which entitles the holder to supplies up to the monetary value stated on the voucher (eg a gift voucher) is not a taxable supply when purchased. The supplies made to the holder on redemption of the voucher will be taxable supplies (if that is the character of the goods or services supplied);
    • a voucher for a specified good/service or which does not bear a monetary value on its face will be subject to GST at the time the voucher is issued. When the voucher is redeemed for a supply, the consideration for that supply is confined to any additional consideration provided at that time. If a voucher merely entitles the holder to a discount on the price, then GST will be properly accounted for on the discounted price.

    If you sell a voucher for accommodation which does not fit the description in the first dot point above, you account for GST when the voucher is sold. If the price of the accommodation is more than the value of the voucher, GST is only payable on the extra charge.

    6.12 Vouchers (other)

    Q: If I sell a voucher before July 2000, how do I know if it will be redeemed after July 2000 and therefore subject to GST?

    A: A voucher for goods/services sold before 1 July 2000 will be subject to GST when issued if there is a reasonable expectation that will be redeemed on or after 1 July 2000. A Goods and Services Tax Ruling, GSTR 2000/7External Link "Goods and Services Tax: transitional arrangements - supplies, including supplies of rights, made before 1 July 2000 and the extent to which such supplies are taken to be made on or after 1 July 2000" has issued and deals with "reasonable expectation" at paragraphs 15 to 24.

    A voucher which entitles the holder to supplies up to the monetary value stated on it face, sold before 1 July 2000 will not be subject to GST at time of issue, only if redeemed on or after 1 July 2000 and if the product is subject to GST.

    Section 7 - Caravan Parks and Camping Grounds

    7.1 Definition

    Q: What sort of accommodation is included in the definition of "a caravan park or a camping ground"?

    A: Section 195-1 of the GST Act provides that "commercial residential premises" means "a caravan park or a camping ground or anything similar to residential premises described" as a caravan park or a camping ground. The rental of a caravan, demountable home, permanent cabin or villa on site and the rental of a site for a caravan or a demountable home is caught by this definition even though most individuals who rent sites pay for all associated expenses (eg electricity, gas) (GSTR 2000/20External Link paragraph 129-133).

    7.2 Retirement villages / nursing homes in caravan parks

    Q: Are retirement villages or nursing homes included within "a caravan park or a camping ground; or anything similar to residential premises described" as a caravan park or a camping ground (ie a home park)?

    A: No. A separate guideline relating specifically to Retirement Villages is published on the ATO's tax reform website under Industry Partnerships - Retirement Villages.

    7.3 Rental

    Q: Is GST payable on the rental of caravans and camping sites?

    GST is payable on taxable supplies (section 9-5 of the GST Act). Supplies of commercial accommodation in commercial residential premises satisfies the elements of a taxable supply. The definition of "commercial residential premises" specifically includes "a caravan park or a camping ground" (section 195-1 of the GST Act). However, special rules apply to the amount of GST payable in relation to long term accommodation in commercial residential premises. See question 7.4 below. GSTB 2001/2External Link, dealing with accommodation in caravan parks and camping grounds, provides further information on this issue.

    7.4 Commercial accommodation

    Q: How is GST calculated on the supply of "commercial accommodation"?

    A: The amount of GST payable will depend upon whether the accommodation provided is for long-term or short-term (section 87-5 and 87-10 of the GST Act).

    1. Long-term accommodation is accommodation in which guests stay for 28 days or more. The amount of GST that applies depends on:

    (a) the length of the guest's stay;

    (b) what is included in the charge for the accommodation; and

    (c) whether the premises provide predominantly long-term accommodation (ie at least 70% of guests stay for 28 days or more).

    End of example

    Providers of long-term accommodation may choose to either:

    include no GST in their long term accommodation prices (ie the supply will be input taxed). If the provider chooses this option, they will not have to pay any GST to the Australian Tax Office. However, the provider will not be able to claim input tax credits for GST included in the price of goods and services they acquire for use in providing that accommodation. This option is equivalent to the GST treatment of residential rents(paragraph 40-35(1)(b) of the GST Act); or

    charge a concessional (reduced) amount of GST provided for under division 87 of the GST Act.

    End of example

    Concessional GST treatment is only available for stays of 28 days or more. Whether the concession applies or not will depend on whether the accommodation provider is letting to predominantly long-term or short-term residents, and which GST option the provider chooses. Providers of predominantly long-term accommodation may charge a reduced amount of GST on the whole of the stay where 70% of the guests stay for 28 days or more. The reduced rate of GST is calculated on half of the normal GST-inclusive price(section 87-5 of the GST Act).

    Example 1.

    Irene is a long-term resident at Dalgety Creek Caravan Park. The caravan park provides predominantly long-term accommodation because more than 70% of the total guests stay for long-term. Dalgety Creek's GST-inclusive site fee for both short and long-term stays is $66 per week ($60 plus $6 GST). Because Dalgety Creek provides predominantly long-term accommodation, the GST for Irene is worked out on half that amount. To work out the actual fee, $66 is halved, leaving $33. The GST is 10 percent of $33; that is $3.30. Irene and Steve pay $63.30 ($60 plus $3.30 GST).

    Example 2.

    Danny decides to book a holiday cabin for a six week holiday. Because more than 70% of cabins are occupied by guests staying 28 days or more, the owner has chosen to include GST at the reduced rate. The usual fee for a cabin is $100 per week plus $10 GST. Based on these amounts, the price of a six week stay would be $660 ($600 plus $60 GST). However, as Danny is staying long term, and the operator has chosen to use the concessional GST rate, GST is calculated on half of the normal GST-inclusive amount. Therefore, GST is 10 percent of $330 (that is, $33), making the total price for Danny's stay $633 ($600 plus $33 GST).

    Example 3.

    Sally decides to book a holiday cabin for a two week holiday at Dalgety Creek Caravan Park. The caravan park provides predominantly long-term accommodation because more than 70% of the total guests stay for long-term. Dalgety Creek's GST-inclusive site fee for both short and long-term stays is $66 per week ($60 plus $6 GST). As Sally does not stay for long-term (ie she does not stay for 28 days or more), Sally's stay cannot be treated at the concessional rate. Therefore Sally is charged the full GST-inclusive rate of $66 per week, even though Dalgety Creek Caravan Park provides predominantly long-term accommodation.

    2. Short-term accommodation is accommodation in which guests stays for less than 28 days. Short-term accommodation is subject to GST of 10%.
    For those guests who stay for less than 28 days, the normal GST rate will apply.
    However, for the guests who do stay 28 days or more, providers may either:

    (a) treat the accommodation the same as residential rent and not include GST for supplies in excess of 27 days. They will not be able to claim input tax credits (paragraph 40-35(1)(b) of the GST Act) for services acquired to make supplies in excess of 27 days; or
    (b) include the full GST on the first 27 days and apply a reduced rate to the rest of the stay(section 87-10 of the GST Act) unless the premises are provided for predominantly long term rental.

    End of example

    Example.

    Ralph accepts a temporary work transfer to Adelaide and books into Marble Heights for two months. Marble Heights charges $220 ($200 plus $20 GST) per night for a room. Less than 70% of their guests stay for 28 days or more. For the first 27 days, Ralph will be charged at the normal rate of $220 per night. From day 28 onwards, GST will be calculated on half the GST inclusive price. Half $220 is $110. The concessional GST amount is 10% of $110; that is $11.

    So Ralph will be charged:

    $220 per night for the first 27 days, and

    $211 per night for the rest of his stay.

    All supplies of commercial accommodation in which guests stay for less than 28 days are subject to GST under the basic rules at 10% of the value.

    7.5 Commercial accommodation concessions

    Q: Will GST concessions apply to fees and charges related to Commercial accommodation?

    A: The GST concessional treatment applies to taxable supplies of "commercial accommodation" that are provided in commercial residential premises and provided as long-term accommodation (section 87-5 of the GST Act). The meaning of "commercial accommodation" under subsection 87-15 of the GST Act means the right to occupy the whole or any part of commercial residential premises, including, if it is provided as part of the right to so occupy, the supply of:

    (a) cleaning and maintenance; or
    (b) electricity, gas, air-conditioning or heating; or
    (c) telephone, television, radio, or any similar things.

    End of example

    It does not include the provision of meals, personal laundry, drinks, cost of telephone calls or service charges. Any service that is provided separately to that which is supplied as part of the tariff is unlikely to be considered part of commercial accommodation and therefore the GST concession will not apply, eg, the provision of separately metered electricity, mini bar items, personal laundry or dry cleaning charges, meals and phone calls. These items will attract the full rate of 10% of the value.

    7.6 Continuity requirement in commercial residential premises

    Q: Does the guest in commercial residential premises have to be present at all times during the whole long-term stay to satisfy the continuity requirement?

    A: Subsection 87-20 of the GST Act specifically provides that "long-term accommodation is provided to an individual if commercial accommodation is provided, for a continuous period of 28 days or more". A guest who is provided with long-term accommodation in a hotel, motel, inn, hostel, boarding house, caravan park, camping ground or similar premises does not need to physically occupy the premises for the entire duration of the stay for the stay to be continuous. For example, a guest who occasionally leaves the premises overnight to travel, will maintain continuity of the stay provided they are charged for the days they are absent and their suite or room may not be let in their absence. If management moves a guest to another room either when a guest is present or away and charges for the new room, this will be treated as one continuous stay.

    In relation to caravan parks, the right to occupy is granted when a site is hired for a caravan, even if the caravan is left unoccupied for most of the time. The continuity of the stay is not broken. Where the operator moves a caravan from one site to another, but effectively maintains the bookings, this is a continuous site rental. However, if the owner of a caravan and the park operator agree to "store" the caravan in another area of the park for an agreed fee, the continuity of the site rental ceases when the caravan is moved. The storage breaks the continuity of the stay as the storage of the caravan is a separate supply, subject to the basic rules (section 9-5 of the GST Act).

    7.7 28 days calculation

    Q: How are the 28 days calculated in relation to commercial residential premises that are not predominantly providing long-term commercial accommodation?

    A: When calculating the 28 days, the day on which the guest is first provided with the commercial accommodation is included in the count, however, the day on which the guest ceases to be provided with the commercial accommodation is excluded. If a guest's stay commences before 1 July 2000, but the stay has been for less than 28 days, the concessions begin when the 28th day has been reached.

    7.8 70% calculation for "predominantly for long-term accommodation"

    Q: How is the 70% calculated when determining whether the commercial residential premises are "predominantly for long-term accommodation"?

    A: The 70% figure is based upon the number of supplies or number of bookings rather than the number of individuals. If each individual is counted, it is likely that operators would include every member of each group that stayed (ie all the children etc) and this is not the intent of the section. The intention of the Act when stating "individuals" is referring to the number of supplies. This is consistent with the approach of the legislation as a whole.

    7.9 Marina Berths

    Q: Are marinas similar to caravan parks and therefore treated in the same manner as "commercial residential premises"?

    A: Pursuant to an amendment to the GST Act, which received Royal Assent on 21 December 2000, the definition of commercial residential premises in section 195 of the GST Act was broadened to include a new paragraph (da) as follows;

    (da) a marina at which one or more of the berths are occupied, or are to be occupied, by ships used as residences.

    End of example

    Section 8 - FBT and GST

    8.1 Employer provided accommodation

    Q: If the employer provides accommodation or discounted accommodation on the premises, is GST applicable?

    A: There is no GST payable on supplies of fringe benefits to employees made in respect of their employment where no employee contribution is made. Employee services are not contributions for these purposes. This includes supplies of accommodation. (However, Fringe Benefits Tax needs to be considered.) Where an employee makes a contribution towards such a benefit, there will be no GST arising where the accommodation is the employee's usual place of residence, ie the benefit is a housing fringe benefit.

    Where the provision of the accommodation is not the employee's usual place of residence, the employee's payment will be subject to GST if the provision of the accommodation is a taxable supply. For example, if a hotel provides rooms to guests and provides occasional (short term) room use for employee accommodation, this would not be an input taxed supply and any contribution by the employee would be subject to GST. See the answer to question 6.2 and paragraphs 37 to 39 of Goods and Services Tax Ruling GSTR 2000/20External Link "Goods and Services Tax: commercial residential premises" for further details on when employee accommodation is a taxable supply. See Goods and Services Tax Ruling GSTR 2001/3External Link "Goods and Services Tax: GST and how it applies to supplies of fringe benefits" for information on the interaction between Fringe Benefits Tax and GST.

    8.2 Meals supplied to staff

    Q: I supply meals to my staff during their shifts at no charge. Is GST payable?

    A: Where you supply a meal or other fringe benefit to your staff, GST will only be payable where your employees contribute toward the cost of the fringe benefit. If your employees have not made a payment (other than their services) for the meal or other fringe benefit, there is no GST payable on that supply. Goods and Services Tax Ruling, GSTR 2001/3External Link "Goods and Services Tax: GST and how it applies to supplies of fringe benefits" discusses the interaction between FBT and GST and is available on the web site. See in particular paragraph 14.

    8.3 Food given to staff

    Q: When I have excess food I give it to my staff to take home. Does this affect the input tax credits I can claim?

    A: As above, where you supply a fringe benefit to your staff, GST will only be payable where your employees contribute toward the cost of the fringe benefit. If your employees have not made a payment (other than their services) for the fringe benefit, there is no GST payable on that supply. Similarly, the normal rules apply to your entitlement to input tax credits. You may wish to look at one or more of the documents mentioned in the answer to question 2.4 (simplified accounting methods for food retailers). GST Ruling, GSTR 2001/3External Link "Goods and Services Tax: GST and how it applies to supplies of fringe benefits" discusses the interaction between FBT and GST and is available on the web site.

    Section 9 - Wine Equalisation Tax and Excise

    9.1 Wine Equalisation Tax

    Q: How does the Wine Equalisation Tax (WET) work?

    A: WET applies to wine, including:

    • grape wine;
    • grape wine products, such as marsala, vermouth, wine cocktails and creams;
    • fruit and vegetable wines;
    • cider and perry; and
    • mead and sake.

    Wine manufacturers, wine wholesalers and wine importers will usually have a WET liability and be required to pay WET to either the ATO or Customs. Wine retailers will normally pay WET to their supplier as part of the purchase price. However, if a retailer makes its own wholesale sales of wine (that is, to a reseller) or purchases from an unregistered winery, they may have a WET liability.

    There is a rebate scheme for cellar door and mail order sales by wine producers.

    The rebate scheme is jointly funded by the Commonwealth and State Governments and effectively means that WET payable on cellar door and mail order sales will be fully rebated up to and including an annual wholesale value of $300,000.

    A number of fact sheets are available at the WET Homepage at www.ato.gov.au.

    9.2 Excise on alcoholic drinks not subject to the Wine Equalisation Tax (WET)

    Q: What are the key changes?

    A: Under the arrangements introduced on 1 July 2000, excise duty applies to:

    • beer
    • spirits such as brandy, rum and vodka
    • liqueurs, and
    • other alcoholic drinks not covered by the wine equalisation tax (WET).

    Customs duty applies to similar imported alcoholic drinks.

    The changes introduced on 1 July 2000 on products not covered by the WET include:

    the removal of the 37% wholesale sales tax on alcoholic drinks

    • a corresponding increase in excise and customs duty rates
    • a three tiered duty rate structure for beer based on alcoholic content
    • a duty on alcoholic drinks with less than 10% alcohol content by volume, equivalent to the excise on beer (but without its duty-free threshold), and
    • a duty on drinks with more than 10% alcohol content by volume, equivalent to the spirits rate.

    The GST still applies to all sales of alcoholic drinks.

    9.3 Diesel and other fuels

    Q: How does the New Tax System affect my tour business.

    Reduced Fuel Costs

    From 1 July 2000, the Federal Government introduced a number of changes to the taxation of petrol and diesel fuel.

    Duties payable on petrol

    With the introduction of the GST, petrol and diesel excise and customs duties were reduced. Registered businesses pay less for petrol and diesel fuel than otherwise would be the case by claiming an input tax credit for the GST payable on fuel used for business purposes.

    Diesel Fuel Rebate Scheme (off road) extended

    The Diesel Fuel Rebate Scheme was extended through the provision of a full rebate of the excise paid on diesel fuel and the inclusion of rail and marine transport in those categories of use that are eligible for rebate. Eligible rail and marine activities include:

    hiring or chartering of vessels for fishing or other recreational activities,

    operating vessels that provide marine transport for goods or passengers, and

    transporting goods or passengers in a train, tram or other rail vehicle, where the diesel fuel is used in the course of carrying on an enterprise.

    For further information on the Diesel Fuel Rebate Scheme and to ascertain your eligibility, please contact 1300 657 162.

    Grant for on-road uses of diesel and alternative fuels (on-road scheme)

    The Diesel and Alternative Fuels Grants Scheme (the on road scheme) provides for a grant to be paid on diesel and alternative fuel used for certain on road transport activities in carrying on your enterprise.

    Generally, the grant is available for vehicles with a gross vehicle mass of 4.5 tonnes or more, and registered for use on public roads.

    All vehicles over 20 tonnes travelling on public roads within Australia, regardless of whether the roads are metropolitan or not, are eligible under the scheme.

    Vehicles of 4.5 tonnes or more, but less than 20 tonnes are entitled to a grant if they are used for transporting passengers or goods:

    • between a point outside a metropolitan area and another point outside a metropolitan area; or
    • between a point outside the metropolitan area and a point inside a metropolitan area; or
    • between different metropolitan areas.

    Metropolitan areas are defined under the legislation as being:

    • Newcastle-Sydney-Wollongong;
    • Melbourne-Geelong;
    • Sunshine Coast-Brisbane-Gold Coast;
    • Perth metropolitan area;
    • Adelaide metropolitan area; and
    • Canberra metropolitan area

    Trips by vehicles of 4.5 tonnes or more, but less than 20 tonnes, that are wholly within a metropolitan area are not eligible for the grant. Highways and motorways connecting urban centres within a metropolitan area are considered to be within the metropolitan area boundaries and similarly, are not eligible.

    Vehicles of less than 4.5 tonnes are not eligible under this scheme.

    For further information on the Diesel & Alternative Fuels Grants Scheme and to ascertain your eligibility, please contact 1300 657 162.

    Section 10 - Miscellaneous

    10.1 Vending machine sales

    Q: How do I account for vending machine sales?

    A: You will need to account for GST on your vending machine sales in the tax period in which you empty the vending machine of coins.

    If vending machines on your premises are operated by another business and you receive a commission on sales, GST is payable by you on the commission.

    10.2 Pricing issues

    Q: What is the difference between markups, margins, commissions and service fees?

    A: Pricing issues are the responsibility of the ACCC. Please contact the ACCC on 1300 302 502 or www.accc.gov.auExternal Link for further information.

    The terms commission and service fee would be defined according to their usual meaning for accounting purposes.

      Last modified: 24 Jun 2015QC 16472