Qantas has lost a lengthy legal battle to recoup $34 million in GST it paid to the tax office on unused tickets for flights.
The High Court on Tuesday ruled that Qantas was not entitled to claim back the GST it collected on tickets sold for flights that were never taken, and where customers never sought a refund, between 2005 and 2008.
Tax experts believe the decision could have implications for other companies selling tickets for events that are never used.
In a 4-1 decision, the court determined Qantas had still provided a service to those customers and therefore was liable to pay the GST it collected for tickets on unclaimed flights.
Qantas had argued that as it never actually provided the flights to those particular passengers, it did not have to remit the GST received on those fares to the tax office.
"Qantas is disappointed with the High Court's decision," the airline said in a statement.
"The decision will have no financial impact on the Qantas Group because the relevant GST has already been paid to the tax office."
The Tax Institute senior tax counsel Robert Jeremenko said the decision had implications for pre-paid tickets sold for concerts and sporting events.
"Just because a customer doesn't turn up for a flight, a show or whatever that might be, doesn't mean that the GST sits there with the company as a windfall," Mr Jeremenko said.
"Certainly from today onwards it makes it very clear that for a company that makes those supplies - regardless if the customer turns up or not - the company still owes the tax office the GST."
Between July 2005 and June 2008, Qantas paid the tax office $26.6 million in GST collected on unused tickets and a further $7.6 million on tickets which were not used and no refunds were ever claimed.
The High Court said Qantas sold the flights on the basis that the airline would use its best endeavours to carry the passengers and their luggage.
"Consequently, even if the passenger did not actually travel, there was a taxable supply incurring GST liability," the summary of the High Court judgment said.
After initially failing to resolve its dispute with the Australian Taxation Office (ATO), Qantas took the matter to the Administrative Appeals Tribunal, which ruled in favour of the ATO.
Qantas appealed, and the Federal Court of Australia came down on Qantas's side.
The tax office then sought leave to have the matter heard by the High Court.
Qantas shares closed three cents higher at $1.22.