4 August 2000 GST/HST Interpretation 8331/HQR0001937 - Funeral Service of an Indian Individual

Dear XXXXX

I refer to your facsimile of May 18, 1999, to XXXXX, and my subsequent discussions with you and XXXXX (the "funeral home"), regarding the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies of funeral services. Specifically, you wish to obtain clarification on the application of GST/HST to the funeral service of an Indian individual.

Statement of Facts

Our understanding of the facts is as follows.

1. The funeral home is registered for GST/HST. Its activities include providing funeral services.

2. The funeral home's invoice describes its activities as follows:

Funeral Services

-    Professional and staff services

-    Funeral home facilities and equipment

-    Use of the facilities for visitation and/or Chapel

-    Embalming and or other preparation

-    Transfer of remains

-    Automotive requirements

Use of limousine/Family car

Use of lead/Pallbearers car

Use of funeral coach

-    Documentation requirements: Death certificate, document for the Canadian Pension Plan

-    Supplies: cross, registration book, candles

-    Extra evening visitation

Disbursements

-    Cemetery plot

-    Opening and closing charges

-    Crematorium charges

-    Clergy/Church

-    Daily press

-    Municipal registration fee

-    Out of town Funeral Director

-    Photo/Prayer cards

-    Flower rental

-    Air fare

-    Casket

Interpretation Requested

Is the funeral service of an Indian individual subject to the GST/HST?

Interpretation Given

A funeral service of an Indian individual is relieved of GST/HST in accordance with our policy on funeral services of Indian individuals.

Our current policy on the application of the GST/HST to the funeral service of an Indian individual is that such services will be relieved of tax where the deceased is an Indian (has been in possession of a Certificate of Indian Status Card issued by the Department of Indian Affairs and Northern Development), and the following conditions apply:

1. Burial is on reserve; or

2. Where the burial is not on a reserve, or when the body is donated to science or it is cremated and there is no burial, a memorial or final service is performed on reserve.

We require that suppliers maintain adequate documentary evidence, where GST/HST was not collected, that the funeral service was provided for a deceased Indian and either the interment was on a reserve or the final service was on a reserve.

In cases where the deceased is buried on reserve the documentary evidence could consist of proof of delivery of the body to a reserve.

In cases where the deceased is not buried on reserve, or is donated to science or cremated (no burial), the documentary evidence could consist of proof of delivery of the body to the other cemetery, the hospital or the crematorium, along with a published notice (Obituary) in the local newspaper listing:

-    the date of death; and

-    the date when interment will be held (when burial is off reserve) and/or

-    the date when the memorial or final service is to be held on a reserve;

In the case where there is no published notice, a letter signed by a Band official which includes the above information is sufficient.

When the above conditions are met and the recipient of the funeral service of an Indian individual is someone other than a federal government department, the funeral service of an Indian individual is relieved of GST/HST. Specifically, when a federal government department enters into a contract for the supply of a funeral service for the funeral service of a deceased Indian individual, GST/HST must be collected.

We have analyzed your invoice to determine which activities, for purposes of our policy, form part of a funeral service of an Indian individual.

Some activities are listed on the invoice as "disbursements". XXXXX has confirmed that those activities have been purchased in the name of the purchaser while the funeral home was acting as the purchaser's agent. The expenses are invoiced to the purchaser and paid by the funeral home as agent. The expenses are treated as having been incurred by the client. To the extent that the activities have been incurred as agent of the purchaser, they are supplies of their own and they are not part of your supply of a funeral service of an Indian individual. Please note that the determination of whether a person acts as an agent for a particular transaction is a question of law and facts. Please find attached draft policy statement P-182: Determining the meaning of "agent" and "agency".

The invoice also listed a number of activities under the heading Funeral Services. It is our understanding that those activities generally form part of the ongoing activities undertaken and provided by a supplier of funeral services. It is our further understanding that you are the sole supplier of these activities. We are of the opinion that for the purpose of our policy on the funeral service of an Indian individual, these activities form part of the supply of a funeral service of an Indian individual and are relieved of GST/HST if the above conditions are met.

Please also be advised that we are currently reviewing our policy concerning the application of tax to the funeral services of an Indian individual. Until such time this issue is resolved, the supply of a funeral service of an Indian individual will be relieved of tax under the conditions listed above.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 957-1175.

Yours truly,

Don Gagnon
Technical Analyst
Aboriginal Affairs Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate