THE High Court will rule today on whether Qantas can keep an extraordinary $34 million it has collected in GST from customers who did not show up, in a landmark judgment that hinges on what exactly is a service.

The Tax Office says Qantas and its subsidiary Jetstar owe $26.6 million in GST they collected on forfeited flights in the first eight years of the tax.

Qantas owes a further $7.6 million in GST it collected on tickets for which customers never bothered to claim refunds.

The airline says it cannot owe the money because it did not supply a flight, meaning it did not supply a service. The Tax Office says the fact that Qantas kept the fares and persuaded its customers it had done enough to keep the fares meant it did supply a service of some kind.