24 September 2003 GST/HST Interpretation 46745 - Application of GST/HST to Funeral Services of Indians

Dear XXXXX

Thank you for your e-mail XXXXX requesting a clarification of a Canada Customs and Revenue Agency (CCRA) policy concerning the application of the Goods and Services Tax (GST) to funeral services provided to status Indians.

CCRA's policy for the application of the GST to Indians is described in Technical Interpretation Bulletin (TIB) B-039R, entitled GST Administrative Policy - Application of GST to Indians. In general, under TIB B-039R, services provided to Indians must be performed wholly on reserve for tax relief to apply. Our interpretation of the application of TIB B-039R to funeral services provided to Indians is as follows.

In the discussion provided below, the plural term, "funeral services" and the singular term "funeral service" are used. Subsection 360(1) of the Excise Tax Act defines the term "funeral services" to include the provision of any property (including a burial plot, coffin or headstone) relating to the funeral, burial or cremation of an individual provided under a funeral service arrangement. As well, CCRA takes the position that the term "funeral services" also includes the following when provided under an arrangement for the provision of funeral services: property or services provided for the care and embalming of the deceased; property or services provided in connection with the funeral rite for the deceased; and the transportation of the deceased.

The singular term, "funeral service," is used below as a synonym for the term "final service."

CCRA's interpretation of the GST/HST relief described in TIB B-039R for situations concerning funeral services

For purposes of TIB B-039R, funeral services are relieved of GST/HST where the deceased has been in possession of a Certificate of Indian Status Card issued by the Department of Indian Affairs and Northern Development, and one of the following conditions apply:

•   the burial takes place on a reserve; or

•   where the burial does not take place on a reserve, or, where there is no burial (e.g., cremation, donation to science), a memorial or final service is performed on a reserve.

Where the supplier relieves the GST/HST, the supplier must maintain adequate documentary evidence that the funeral services were provided for an Indian and that one of the conditions described above was satisfied.

In cases where the deceased is buried on reserve, the documentary evidence could consist of an invoice for funeral services indicating that the resting place of the deceased is on a reserve.

In cases where the deceased is not buried on reserve, or is donated to science or cremated (no burial), the documentary evidence of a memorial or a final service taking place on a reserve could consist of the invoice for funeral services, along with a published notice (an obituary) in the local newspaper listing:

•   the date of death; and

•   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 that includes the above information is sufficient.

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

Note that the deceased Indian need not have been a resident of a reserve.

Interpretations Requested

You have provided us with six situations to analyze. In each situation, the deceased has been in possession of an Indian Status Card, and it is assumed that the recipient of the supply is not a federal government department.

1. The reserve of the deceased has neither a church nor a cemetery. The funeral visitation is held on the reserve, while the funeral service is held off the reserve. The burial takes place at a municipal cemetery (i.e., it is located off reserve).

2. The reserve of the deceased has a church and a cemetery. The visitation is held on reserve. However, the funeral service is held off reserve, and the burial or cremation takes place off reserve.

3. The deceased had been a resident of a reserve. The visitation, funeral service and cremation all take place off reserve.

4. The deceased had been a resident of a reserve. The cremation takes place off reserve. Neither a visitation nor a funeral service is held.

5. The deceased had been a resident of a reserve. The visitation, funeral service, and the burial or cremation, all take place off reserve. A traditional Aboriginal ceremony is held on reserve, after burial or cremation, at a ceremonial fire.

6. The deceased had not been a resident of a reserve. The funeral service and/or burial take place on reserve.

Interpretations Given

Our interpretations of your situations are provided below.

1. In this situation, the funeral visitation connects the funeral services to a reserve. The question here is whether the visitation can be considered to be a memorial or final service. (We assume here that the funeral services provider is involved with the visitation, and retains proof of its occurrence on reserve.) CCRA takes the position that a funeral visitation is an activity of commemoration. A published announcement invites family, friends and the public to come together for mutual support and to pay respect to the deceased. If the funeral visitation takes place on a reserve, that commemorative activity satisfies the policy's requirement that a memorial be held on reserve. Therefore the funeral services are relieved of GST/HST.

2. The funeral services held off reserve that include a visitation on reserve are relieved of GST/HST, for the same reasons provided for item 1 above.

3. In this situation the funeral services all take place off reserve with no connection to a reserve. As a result, they are not GST/HST relieved.

4. The off reserve cremation services do not include a memorial or final service to connect the funeral services to a reserve. As a result, the funeral services are not GST/HST relieved.

5. The traditional Aboriginal ceremony qualifies as a memorial or final service. The funeral services in this situation are GST/HST relieved. As the traditional ceremony may be held without the participation of the funeral services provider, the provider will have to retain documentary proof that the ceremony occurred. CCRA will accept a letter signed by a band official attesting to it.

6. As the funeral service and/or burial take place on reserve, the funeral services in this situation are GST/HST relieved.

The foregoing comments represent our general views with respect to the subject matter of your letter. Proposed amendments to the Excise Tax Act, if enacted, could have an effect on the interpretation provided herein. These comments are not rulings and, in accordance with the guidelines set out in section 1.4 of Chapter 1 of the GST/HST Memoranda Series, they do not bind the Canada Customs and Revenue Agency with respect to a particular situation.

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,

Dwight Kostjuk,
Rulings Officer
Aboriginal Affairs Unit,
PSBs and Governments Division,
Excise and GST/HST Rulings Directorate