GST and Travel Fares and Accomodation

I have several clients who have queried how GST and the related expense is to be treated on airfares and pre-booked accomodation.

In most instances airfares etc are ticketed and issued with a tax invoice at the time of booking. If that fare is later dishonoured and exchanged for a credit - what happens ?

Despite what the airlines may do if they give a travel credit this means that the original tax invoice is no longer valid. The fare has been exchanged for a credit and the process normally requires the provider to isssue a tax adjustment note for this. Therefore it becomes a financial supply and no tax credit is available. At the time of later use the carrier etc would issue a tax invoice and the GST will be creditable in that period. This is the typical processs for store cards etc. These have no GST. The use of the card generates the taxable supply and GST issue. The resulting tax invoice that is issued at that time is relevant.

No deduction is available either since no expense has been incurred. Its not a prepayment but a payment for a travel credit. The total cost may need to be deferred. And when used the deduction and GST recognised.

If the fare is forfeited then thats different. The expense and GST as originally invoiced would stand.