Edited version of private ruling

Authorisation Number: 1011679099636

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Ruling

Subject: GST and assisting clients with visa applications

Question

When you supply visa application assistance to an Australian resident individual who is in Australia when this service is done, is this supply GST-free under section 38-360 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Advice

When you supply visa application assistance to an Australian resident individual who is in Australia when this service is done, this supply is not GST-free under section 38-360 of the GST Act.

Relevant facts

You are an Australian company and registered for the goods and services tax (GST).

You assist individuals (Australian and non-resident) with the processing of overseas visa applications.

The steps you take in assisting the individuals (clients) with the overseas visa applications are:

The client contacts you after researching for visa assistance.

You discuss the visa service and take payment for this service when the client wishes to go ahead.

You email your personal application form and detailed guidelines to the client.

The client completes the forms and returns it to your office along with the requested supporting documentation.

The received documentation is allocated to your specialist visa consultant.

Your visa consultant reviews the client's file and liaises with the client directly to obtain any missing information, providing the client with support at all times.

Your visa consultant, once they have obtained all documentation/information, then goes online and applies for the appropriate visa on behalf of the client through the High Commission (HC), and answers all questions in a way in which the application will be successfully accepted.

You book the client's biometric appointment on behalf of the client.

The client is then emailed out your personalised completed online application (which has been completed online with the HC on their behalf), booking confirmation for their biometrics and detailed lodgement instructions.

The client attends the biometrics appointment and posts all documents to the HC in Australia (following the detailed lodgement instructions provided by your visa consultant).

Your visa consultant is advised by HC when the visa application is approved and dispatched to the client.

Your visa consultant contacts the client to advise of the successful outcome of the visa application.

The HC posts back the original passport (with visa inside) to the client.

You and the HC advise all clients not to book their overseas flights prior to a visa application being successfully approved. Once a visa approval is received, the clients will then themselves book a flight.

The visa application service is not associated or related to any other services you provide.

Reason for decision

Section 38-360 of the GST Act is about travel agents arranging overseas supplies.

Under section 38-360 of the GST Act, a supply is GST-free if:

a) the supplier makes it in the course of course of carrying on an enterprise as a travel agent; and

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

All the requirements in that section need to be satisfied for the supply to be GST-free.

The term 'travel agent' is not defined in the GST Act. However, we consider as expressed in the fact sheet GST Travel agents and commissions (copy attached) that a travel agent is not limited to registered travel agents but can cover other tourism enterprises, such as airlines, hotels and professional conference organisers, who arrange domestic and overseas travel on behalf of another person or persons.

Issue 2 in the Tourism Industry Partnership Issues Register (available at www.ato.gov.au) provides guidance on the GST treatment of a fee received by a travel agent for arranging the processing of a visa application. The decision for this issue is as follows:

Decision

The service of making visa applications is GST-free. The supply is GST-free under section 38-360 because the use or enjoyment of the visa takes 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, thereby 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 a component of arranging the passenger's travel outside Australia.

From the information received, your activities in assisting clients with visa applications do not involve arranging the international travel of the clients. It is the clients who organise for their international travel on receipt of their visa.

You therefore cannot be considered to be a 'travel agent' as your supply of assisting the clients with visa application is not a component of arranging the international travel of the clients, a service which is usually performed by a travel agent. Paragraph 38-360(a) of the GST Act is therefore not satisfied.

Since all the requirements in section 38-360 of the GST Act are not met, your supply of assisting clients with visa application is not GST-free under that section.