File #11950-1
Reference 25/VI/V
February 6, 1997
This concerns your memorandum of November 27, 1996, concerning the application of GST to supplies made in connection with human burial in XXXXX XXXXX[.]
Facts
Outlined below are the facts of the case, as included in your memorandum and in the material received from XXXXX on January 13, 1997.
1. The XXXXX (the Association) is a registered charity.
2. The Association operates and maintains an inter-denominational cemetery on behalf of several local churches in XXXXX, all of which are registered charities.
3. When the cemetery was created, the land was deeded to the participating denominations. No one else, including the Association, owns any of the land that is set aside for burials.
4. The Association bills the families of deceased persons for "plots" with respect of the burial. No GST is charged on the supply.
5. Funeral directors invoice the families of the deceased for funeral services, and GST is charged on the consideration. The funeral directors do not charge any services to the Association.
6. Interment is perpetual in all cases.
7. The churches that perform the funeral and burial services for persons interred in the Cemetery do not charge the families of the deceased persons for any supply of real property in respect of the burials. Nor does the title of a specific plot change when a person is interred. The church retains legal title to the plot.
8. In a letter dated December 14, 1996 XXXXX indicated that the "plot fees" charged by the Association to the families of deceased persons are "for the maintenance and perpetual care of the cemetery".
Decision Requested
What is the GST status of the supplies of "plots" made by the Association to the families of deceased persons who are interred in the Cemetery?
Response
The supplies of "plots" being made by the Association were actually supplies of perpetual care service that are exempt of GST.
Rationale
Although the invoices issued by the Association refer to supplies of cemetery plots, it is not actually supplying cemetery plots. Instead, it is supplying a service of perpetual care of the cemetery plots. A supply of a service of perpetual care by a charity is exempted by section 2 of Part VI of Schedule V to the Excise Tax Act (ETA) until December 31, 1996. After that date, as a result of the Ways and Means Motion of April 23, 1996, such supplies will be excluded from section 2 of Part VI by means of a proposed amendment, but will be exempted by a proposed new provision, section 1 of Part V.[1] of the ETA.
However, the letter dated December 18, 1990, from XXXXX, was incorrect in stating that the sale of cemetery plots to individuals by a charity would be exempted by section 25 of Part VI of Schedule V to the Act. If a charity were to supply a cemetery plot to an individual by way of sale, and no structure had been located on the plot prior to its sale, it would be a taxable supply of real property.
Prior to January 1, 1997, the supply would have been excluded from the exempting provision in section 25 of Part VI by reason of paragraph 25(c). As of January 1, 1997, the supply is excluded from the exempting provision in section 1 of Part V.[1] of Schedule V to the ETA by reason of paragraph 1(l) of Part V.[1] in the Ways and Means Motion, which was changed to paragraph 1(k) of Part V.[1] in Bill C-70.
If you require any further information concerning this matter, please contact Mr. Don Dawson at (613) 952-9211.
J. Sitka
A/Director
Financial Institutions and Real Property Division
GST Rulings and Regulations
D. Laflèche
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