Goods and Services Tax Industry Issues
Tourism and Hospitality Industry Partnership

Air transport within Australia

• Please note that the PDF version is the authorised version of this ruling.
  This publication is extracted from the Tourism and Hospitality Industry Partnership - issues register. See travel agents issue 12 of that register. This publication should be read in conjunction with the related content of that register where further context is required.

This publication provides you with the following level of protection: This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you.

1. Tourism operators provide scenic flights, hot air balloon flights and charter flights which may not involve the transport of a person from one destination to another.

Issue

2. Does 'Transport of a passenger within Australia by air' include:

a.

charter flights

b.

scenic flights, hot air ballooning trips

if they are all part of the international holiday package?

Decision

3. 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'.

4. The transport of a passenger within Australia by air is GST-free, but only if:

•

the transport is part of a wider arrangement, itinerary or contract for transport by air involving international travel;

•

at the time the arrangement, itinerary or contract was entered into, the transport within Australia formed part of a ticket for international travel, or was cross referenced to such a ticket, issued at that time.

Or

•

the passenger is a non-resident;

•

the transport was purchased while the passenger was outside Australia.

5. Applying this to the examples given:

•

A charter flight that conveys passengers from one place to another place is transport of a person within Australia by air for GST purposes. The charter flight would be GST-free if the conditions above are met.

•

A scenic flight or hot air balloon flight is not the transport of a person within Australia by air for GST purposes because it does not convey passengers from one destination to another, but rather provides a sight-seeing service. Where a flight has no specified destination distinct from the point of departure at which passengers disembark, the flight does not meet the definition of 'transport'. GST is payable on these services, even if purchased by a non-resident outside Australia.

References