Show download pdf controls
  • History Issue 44 - Tourism and Hospitality

    Old version of issue 44 replaced in November 2003

    44. Treatment of commission on local land content.

    Is it acceptable to split the supply into

    • supply of a right to accommodation; and
    • supply of arranging rights to accommodation

    Finalised. Inbound tour operators "ITO"s provide a range of services to international non-resident travel wholesalers resulting in the sale by the ITO of travel rights to Australian land products such as the rights to accommodation.

    The international non-resident travel wholesalers on sell these rights to retail travel agents who in turn sell the rights to the visiting tourist.

    There are two supplies made by the ITO, namely the sale of the travel rights and the service of arranging the travel rights.

    The fee for the arranging of the rights is shown separately and distinctly from the charge for the supply of the rights on a Tax Invoice.

    The sale of the travel rights is a taxable supply. However, the arranging services are GST free under item 2 of Subsection 38-190(1) of the A New Tax System (Goods and Services) Act 1999 provided

    (a) the arranging services are carried out under normal commercial trading terms and conditions; and
    (b) there is no manipulation resulting in a charge at less than cost for the sale of the rights, that is, there is no manipulation of the value of the supply.

      Last modified: 30 Oct 2009QC 17320