Australia's 4 major airlines forced to make changes to refund policies in significant win for travel

[DerekG]

Always remember, if you do not get on the flight the airline does not pay any taxes or airport fees for the empty seat. You are always entitled to a refund of these taxes & charges.

 

[oz_mark]

Always remember, if you do not get on the flight the airline does not pay any taxes or airport fees for the empty seat. You are always entitled to a refund of these taxes & charges.

Not so for GST - this still goes to the ATO (due to a high court decision that GST is payable at the time of booking)

 

[DerekG]

GST is a charge for Goods & Services & if you do not get on the plane, no goods or services have been provided other than the GST that relates to the "booking fee" itself. When you book a ticket direct with an airline you rarely see a "booking fee" listed in the taxes & charges. The airline claims a GST refund back from the ATO at the time the airline processes its refund to you (except for the GST that relates directly to any "booking fee" as listed on the original tax invoice).

Under the basis of Westminster Law, a person cannot legally be charged for goods or services that were never availed to them.

 

[MEL_Traveller]

GST is a charge for Goods & Services & if you do not get on the plane, no goods or services have been provided other than the GST that relates to the "booking fee" itself. When you book a ticket direct with an airline you rarely see a "booking fee" listed in the taxes & charges. The airline claims a GST refund back from the ATO at the time the airline processes its refund to you (except for the GST that relates directly to any "booking fee" as listed on the original tax invoice).

Under the basis of Westminster Law, a person cannot legally be charged for goods or services that were never availed to them.

This is the position the Federal Court reached.

The High Court overturned that decision. GST is indeed payable for missed flights.

You can find a summary of the decision here courtesy of the Lavan law firm: High Court decision on Qantas GST liability – possible ramifications for insolvency practitioners | Lavan

 

[woodborer]

The airline claims a GST refund back from the ATO at the time the airline processes its refund to you (except for the GST that relates directly to any "booking fee" as listed on the original tax invoice).

The airlines can't claim the GST back.

 

[DerekG]

Take a look at the link above provided by MEL_Traveller.

Qantas appears to have been poorly advised when writing up their contracts of carriage:

"Lavan Legal comment

Although the High Court approved the notion that GST liability can arise on entering into a contract rather than the actual supply of a service, the judicial reasoning in Qantas makes it clear that this particular finding was dependent on the words of the contract (and thus the facts of the particular case). Careful consideration always needs to be given to the words of the contract when considering when the taxable supply occurs for the purposes of GST liability."

 

[MEL_Traveller]

Take a look at the link above provided by MEL_Traveller.

Qantas appears to have been poorly advised when writing up their contracts of carriage:

"Lavan Legal comment

Although the High Court approved the notion that GST liability can arise on entering into a contract rather than the actual supply of a service, the judicial reasoning in Qantas makes it clear that this particular finding was dependent on the words of the contract (and thus the facts of the particular case). Careful consideration always needs to be given to the words of the contract when considering when the taxable supply occurs for the purposes of GST liability."

Well - don't worry about QF, worry about the passenger! I don't think they've changed their contracts either?

I suspect this would affect all airlines, not just QF, as they all have pretty similar contracts.

 

[oz_mark]

Take a look at the link above provided by MEL_Traveller.

Qantas appears to have been poorly advised when writing up their contracts of carriage:

Not sure that that is a fair statement. It hinged around the fact that Qantas don't guarantee that you'll be on a particular flight:

The Qantas conditions and the Jetstar conditions did not provide an unconditional promise to carry the passenger and baggage on a particular flight. They supplied something less than that. This was at least a promise to use best endeavours to carry the passenger and baggage, having regard to the circumstances of the business operations of the airline[1]. This was a "taxable supply" for which the consideration, being the fare, was received.

I don't think any airline guarantees a particular flight. Anyway, you can read the judgement yourself
Case S47/2012 - High Court of Australia