A recent Federal Court decision has implications for taxpayers in a variety of industries who receive payments for services.
In Qantas Airways Limited v. Commissioner of Taxation, the Court agreed with Qantas’ claim that it was eligible to claim GST refunds in the case of pre-paid fares received from passengers who had cancelled their reservation or failed to take the flight in cases where no refund was available or claimed.
The full Federal Court confirmed there is no taxable supply for GST purposes when the relevant supply does not occur; the essence, purpose, substance and reality of the transaction must be identified rather than artificially dissecting the arrangement.
It is important to note the GST refunds must be claimed within four years after the end of the relevant year for. You can do this by filing a revised activity statement or by lodging a ‘Notification of Entitlement’ to the GSF refund.