Private ruling: GST - supply of facilitation service
Date of advice: 24 July 2025
Published: 22 September 2025

Ruling: Q1: Is the entity making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when it makes the supply of facilitation services in relation to arranging holiday packages as an agent for non-resident travellers? | A1: Your supply of facilitation service to non-resident travellers outside of Australia is not a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). | Q2: Is the commission received from the non-resident travellers for acting as an agent in relation to arranging the holiday packages, subject to GST? | A2: Your commission that you receive from the non-resident travellers for acting as an agent in relation to arranging the holiday package is not subject to GST. | Q3: Is the entity, as an agent entitled to claim input tax credit on the supply of Australian land products made by the Australian Product Providers to the non-resident clients? | A3: You, as an agent of the non-resident are not entitled to claim input tax credit on the supply of Australian land product made by the Australian product providers to the non-resident travellers directly.

Relevant facts and circumstances: 1. You carry on an enterprise of arranging tours to Australia for non-residents and you are registered for goods and services tax (GST). 2. You arrange tour packages which may include airfares, hotel accommodation, car hire, entry into cultural and entertainment venues, meals and other services. 3. Non-resident travellers engage you as their agent to arrange the tour to Australia. You arrange with airlines, hotels and tour companies to book tours on behalf of the non-resident travellers. 4. You act as an agent when you negotiate with Australian product providers (e.g. Hotels, restaurants, etc) for the supply of the required holiday package component to the non-resident travellers. 5. You have agreements with Australian product providers, and you get an inbound rate as well as a gross/retail rate and you hold a portion of the difference as your commission for your services as an agent to non-resident travellers. 6. You do not earn any commission from your agreement with the Australian product providers. 7. The Australian product providers supply Australian land products (including hotels, transport services, restaurants etc) directly to non-resident travellers. 8. All packages are purchased by the non-resident travellers overseas before they travel to Australia.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 38-190

Reasons for decision: Summary: Section 9-5 of the GST Act explains when a sale or service is considered a 'taxable supply' - meaning it is subject to GST in Australia. A supply is taxable if all of the following apply: a) you make the supply for consideration and b) the supply is made in the course or furtherance of your enterprise; and c) the supply is connected with Australia; and d) you are registered for GST, or you're required to be registered. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. You have agreements with Australian product providers, and you get an inbound rate as well as a gross/retail rate and you hold a portion of the difference as your commission for your services as an agent to non-resident travellers. This is the consideration you receive for your supply. You make the supply in carrying on your enterprise of arranging tours to Australia for non-residents. You carry on your enterprise in Australia therefore the service that you provide is connected with Australia and you are registered for GST. Therefore, the supply satisfies all of the requirements under section 9-5 of the GST Act. Although, your supply of facilitation services satisfies the requirements of section 9-5 of the GST Act, it should be considered whether the supply will be GST-free under another provision of the GST Act. The supply is not input taxed under any GST provisions. | Detailed Reasoning - GST-free supplies: Section 38-190(1) of the GST Act covers supplies of things, other than goods or real property that are GST-free. Table item 2 of subsection 38-190(1) of the GST Act (item 2) provides that a supply of a thing (other than goods or real property) made to a non-resident is GST-free if the non-resident is not in Australia when the thing supplied is done, and: a) the supply is neither a supply of work physically performed on goods situated in Australia when the work is done, nor a supply directly connected with real property situated in Australia; or b) the non-resident acquires the thing in carrying on the non-resident's enterprise but is not registered or required to be registered for GST. Only one of the paragraphs in item 2 needs to be satisfied. From the information provided by you, paragraph (a) of item 2 is satisfied when you make your supply to non-resident travellers as: • your supply is made to non-residents who are not in Australia in relation to your supply when the supplies are made; and • your supply is neither supply of work physically performed on goods situated in Australia when the work is done, nor a supply directly connected with real property situated in Australia. Accordingly, your supply to the non-resident travellers is GST-free under paragraph (a) of item 2 to the extent that the supply is not negated by subsection 38-190(3) of the GST Act. | Detailed Reasoning - Subsection 38-190(3) of the GST Act: Subsection 38-190(3) of the GST Act provides that without limiting subsection 38-190(2) or (2A), a supply covered by item 2 in that table is not GST-free if: a) it is a supply under an agreement entered into, whether directly or indirectly, with a non-resident; and b) the supply is provided, or the agreement requires it to be provided to another entity in Australia; and c) for a supply other than an input taxed supply - none of the following applies: i. the other entity would be an Australian-based business recipient of the supply, if the supply had been made to it; ii. the other entity is an individual who is provided with the supply as an employee or officer of an entity that would be an Australian-based business recipient of the supply, if the supply had been made to it; or iii. the other entity is an individual who is provided with the supply as an employee or officer of the recipient, and the recipient's acquisition of the thing is solely for a creditable purpose and is not a non-deductible expense. From the facts given, subsection 38-190(3) of the GST Act does not apply to your supply made to non-resident travellers as you are not required to provide your supply to another entity in Australia. Your supply to non-resident travellers is therefore GST-free under paragraph (a) of item 2. | Summary: Your commission that you receive from the non-resident travellers for acting as an agent in relation to arranging the holiday package is not subject to GST. | Detailed Reasoning - Detailed reasoning: You are making supply of facilitation service to non-resident travellers. As explained in question one above, the non-resident travellers are outside of Australia at the time of the supply and the supply is neither a supply of work physically performed on goods situated in Australia when the work is done, nor a supply directly connected with real property situated in Australia. This means that your supply is GST-free under paragraph (a) of table item 2 of subsection 38-190(1) of the GST Act. Therefore, your commission will not be subject to GST. This is consistent with paragraph 8 of the ATO Practical Compliance Guideline PCG 2018/6 on GST - inbound tour operators and agency (PCG 2018/6) where it states: Where you act as an agent of the non-resident to arrange an Australian tour package (when the non-resident is outside Australia), any commission you charge the non-resident in respect of that package will be GST-free. | Detailed Reasoning - Other supplies made by you: Paragraphs 16-19 of the PCG 2018/6 provide that you, having acted as an agent for non-residents in arranging an Australian tour package may also provide additional services while the non-resident tourist is in Australia. The Commissioner considers that in providing these other services and/or products you may act as a principal. These other services or products may include but are not limited to: • meeting and greeting tourists on arrival in Australia • customer assistance while tourists are in Australia, including amending tourist itinerary • bus/transit services • guided tours (for example walking or shopping tours) • provision of gifts. The provision of these additional services by you as a principal may be subject to GST. As a result, your commission may not be wholly GST-free if it relates to both supplies of arranging services (GST-free) and supplies of other products or services provided by you directly in Australia (subject to GST). In these circumstances you may need to apportion your commission to taxable and non-taxable parts in accordance with Goods and Services Tax Ruling GSTR 2001/8 Goods and services tax: apportioning the consideration for a supply that includes taxable and non-taxable parts. | Summary: You, as an agent of the non-resident are not entitled to claim input tax credit on the supply of Australian land product made by the Australian product providers to the non-resident travellers directly. | Detailed Reasoning - Detailed reasoning: Under section 11-20 of the GST Act, you are entitled to the input tax credit for any creditable acquisition that you make. Under 11-5 of the GST Act, you make a creditable acquisition if: a) you acquire anything solely or partly for a creditable purpose; and b) the supply of the thing to you is a taxable supply; and c) you provide, or are liable to provide consideration for the supply; and d) you are registered or required to be registered. Creditable purpose is defined in section 11-15 of the GST Act. You acquire the thing for a creditable purpose to the extent that it is acquired in carrying on your enterprise. However, you do not acquire the thing for a creditable purpose to the extent that: a) the acquisition relates to making supplies that would be input taxed; or b) the acquisition is of a private or domestic nature. You, as an agent of the non-resident travellers do not acquire Australian land products from the Australian product providers. You simply arrange/facilitate the booking of such Australian land products through the Australian product providers for the non-resident. Therefore, there is no creditable acquisition made by you. Hence you will not be able to claim input tax credit on the supply of Australian land products made by the Australian product providers to the non-resident travellers.