The ATO has released a decision impact statement on the Full Federal Court decision in ATS Pacific Pty Ltd v FC of T 2014 ATC ¶20-449.
In that case, the Full Federal Court held that the supplies made by an Australian tour operator to non-resident travel agents (NR travel agents) were not GST-free. In so doing, the court dismissed the taxpayer’s appeal and allowed the Commissioner’s cross-appeal from the first instance decision of Bennett J reported at 2013 ATC ¶20-383.
ATO view of decision
Although the decision relates to specific facts, the Commissioner considers that the decision applies to all inbound tour operators (ITOs) which: ● transact as principal (and not as an agent of the NR travel agent), and are engaged by NR travel agents to enter into contracts with Australian providers for the provision of components of tour packages to NR tourists.
Under the court’s reasoning, the supplies made by these ITOs to their NR travel agent clients are properly characterised as supplies of promises to ensure components of tour packages are provided. The supplies are wholly taxable.
This news story is reprinted from CCH Tax week
Read more details on Accounting Outsourcing Services
In that case, the Full Federal Court held that the supplies made by an Australian tour operator to non-resident travel agents (NR travel agents) were not GST-free. In so doing, the court dismissed the taxpayer’s appeal and allowed the Commissioner’s cross-appeal from the first instance decision of Bennett J reported at 2013 ATC ¶20-383.
ATO view of decision
Although the decision relates to specific facts, the Commissioner considers that the decision applies to all inbound tour operators (ITOs) which: ● transact as principal (and not as an agent of the NR travel agent), and are engaged by NR travel agents to enter into contracts with Australian providers for the provision of components of tour packages to NR tourists.
Under the court’s reasoning, the supplies made by these ITOs to their NR travel agent clients are properly characterised as supplies of promises to ensure components of tour packages are provided. The supplies are wholly taxable.
This news story is reprinted from CCH Tax week
Read more details on Accounting Outsourcing Services
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