Star Alliance - GST on AC domestic awards

Hi,

Am trying to figure out if I'm being given the run around here...

I've booked a one way award on Air Canada YVR-YYZ in J using BMI miles.

BMI are charging me £144 in GST, so based on 7% that means the ticket would have to be worth C$4,000.

I'd have thought that as a FF ticket, the value would be zero so the GST would be either zero or 7% of the airport taxes etc.

Would anyone be willing to try a dummy booking using their FF scheme and tell me what the taxes are coming out at?

Many thanks

Tony

BMI uses a full fare ticket module and calculates the taxes from there. In other words, they book a similar flight in full C and uses that amount as tax.

There should not be any GST on free award tickets, just fuel surcharges etc.

Even when using Aeroplan, which charges the most taxes and fuel surcharges, the final calculation usually comes out to approx. C$90.00 in taxes..for a typical YYZ-YVR roundtrip ticket and that works out to around 45 Pounds only. Aeroplan does not charge GST on award tickets, and GST is not calculated on taxes either.

LH Miles and More charges the least tax. I usually use my M&M miles for domestic AC awards, and I usually end up with US$8 in taxes only, and that's usually on a 4 sector flight award!

Go figure.

Anyway, BD is wrong in all their fare calculations. BTW GST in Canada is now only 6%.

So BMI collects the "tax", then what?

Do they just pocket it? Do they pass it to AC and they pocket it? Does AC actually remit it as GST to the Treasury?

Also, can anyone confirm that a full C fare (one way) on this route runs to C$4000?

I have a similar problem earlier last week, as detailed here: http://www.flyertalk.com/forum/showthread.php?t=743182

I was going to be charged VAT on a Peru outbound ticket, and the amount could have been £300+, but at the end, we settled at a lower amount..

I doubt that the full amount is GST.
It is most probably fuel surcharge ( with GST added to that), plus
airport improvemnt fee, Nav Can surcharge, etc all lumped together in
one amount.

Swiss Tony, I've booked the exact same award with bmi, and I certainly wasn't charged the GST.

Ask the agent to send it back to the taxes dept., or if you have already booked then PM diamond club.

Swiss Tony, I've booked the exact same award with bmi, and I certainly wasn't charged the GST.

Ask the agent to send it back to the taxes dept., or if you have already booked then PM diamond club.

I had the agent send the request back twice before I booked it (do note that this is an entirely domestic itinerary. I think if I re-book to start or end the trip in the US then no GST is payable and give we intend to incorporate Seattle into the trip, this may be what IO end up doing).

I have also PMd diamond club who whilst willing to help was only able to say "it's down as GST, it's being charged by Air Canada, take it up with them".

I expect AC will tell me where to go (i.e. back to the issuing airline).

The problem I have is that something is being badged as a government tax when it clearly isn't. I've taken some advice from an academic I know who is big in international sales tax laws, but perhaps a note to the Canadian Treasury would be the next step...

So BMI collects the "tax", then what?

Do they just pocket it? Do they pass it to AC and they pocket it? Does AC actually remit it as GST to the Treasury?

Also, can anyone confirm that a full C fare (one way) on this route runs to C$4000?

The full one way J fare in J farebasis is C$4970 which no one ever pays because there is now a J fare farebasis J0EXC for C$1598.

This is what the total comes out as:


BASE FARE EQUIV AMT TAXES TOTAL
1- CAD1621.00 GBP807.00 118.60XT GBP925.60ADT
XT 60.50US 1.70ZP 7.50SQ 48.90XG
1621.00 807.00 118.60 925.60TTL
ADT-01 J0EXC
YVR AC YTO Q20.00Q3.00 1598.00J0EXC CAD1621.00END ZPYVR
AC ONLY

Note that GST is listed as XG. Total taxes, fuel surcharges etc is coming out as GBP 118.60.

If however BMI uses the full J fare basis, the total taxes are much higher:


BASE FARE EQUIV AMT TAXES TOTAL
1- CAD4987.00 GBP2482.00 344.80XT GBP2826.80ADT
XT 186.20US 1.70ZP 7.50SQ 149.40XG
4987.00 2482.00 344.80 2826.80TTL
ADT-01 J
YVR AC YTO Q12.00Q3.00 4972.00J CAD4987.00END ZPYVR

In this case, the GST alone is over GBP 149.

I don't know how you should take this up with BMI.

I had the agent send the request back twice before I booked it (do note that this is an entirely domestic itinerary. I think if I re-book to start or end the trip in the US then no GST is payable and give we intend to incorporate Seattle into the trip, this may be what IO end up doing).



If that is the case, Swiss Tony, why don't you just book YYZ - YVR - SEA, if that means removing the GST. Then you can just decide later whether you will use it?

If however BMI uses the full J fare basis, the total taxes are much higher:
In this case, the GST alone is over GBP 149.
I don't know how you should take this up with BMI.

To the OP all I can add is I have never seen GST for fare charged by AC for it's own domestic rewards (how can 6% of a $0 fare be charged after all?) and it's definitely a BD issue. It's not an AC charge, per se.
There would be some XG to be paid, but it would be very minimal (a quid or two?) as it's 6% of the SQ (Airport User Fee) surcharge. Like Guy Betsy, I don't know how you can make BD see sense on this - maybe suggest they read the F-TAX entries (or similar) for Canada in their system and to take careful note of the wording that reads along the lines of "will be 6% of the airfare paid".

EDIT - found this on the web. Apart from the very logical "how can 6% of $0 (being the fare paid) become 150+ pounds" argument, try getting BD to apply the exemption listed at the bottom.

NAME: GOODS AND SERVICES TAX
CODE: XG
AMOUNT: 6% will be levied on the sum of the fare plus current air transportation tax.
Tax applies on all domestic and trans border travel:
- when sold in Canada, or
- when sold outside Canada when first enplanement is in Canada.
- Not applicable on tickets for travel wholly within the USA, even if sold in Canada.
- also applicable to PTA charges.
EXEMPTIONS: (For tickets issued outside Canada for travel wholly within Canada and cross referenced or issued in conjunction with on an international inbound ticket will be exempt from the GST).

Thanks all for your inputs here.

It is a crazy situation, not least because AJLondon paid a different set of taxes to me on exactly the same booking...

I'll give this some thought and have also lodged a request with BMI in the UK to look into this.

Al B - can you point me to that description of XG? My reading of some Canadian government documents was that if it wasn't on one ticket you couldn't get the exemption as part of an international itinerary, but that was from a couple of years ago...

What about the other taxes, may I ask what they amounted to be?

What about the other taxes, may I ask what they amounted to be?

I was quoted (and it states on the ticket) just two taxes:

XG - 144.40 (GST)
SQ - 7.20 (AIF, which I assume is the CAD $15 charged at YVR)

The above are both in GBP.

Applying their exchange rates, that does put the GST in line with the fully flexible J ticket that no one ever buys...

Sounds like BD just grouped ALL the taxes into one as GST.

There is no longer a Vancouver AIF.