20 May 2003 GST/HST Ruling 44923 - Timing of the Application of the GST/HST to Prepaid Funeral Arrangements, ("Bulletin B-091")

Dear XXXXX:

Thank you for your facsimile XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to your operations.

Statement of Facts

Our understanding of the facts is as follows:

1. XXXXX.

2. You are currently in the midst of developing a new computer system that is to replace one with a relatively short life expectancy.

3. The design of the new system had been completed, and construction started, prior to the introduction of the Bulletin B-091.

4. The new system was designed to collect, remit and report GST/HST under the guidance provided by CCRA in 1990 and to which you have been adhering since.

5. The change in interpretation of the legislation was not anticipated, will require material changes to your current and/or new system, and will be costly.

6. You understand that the prepaid cemetery services bulletin is still several months from completion.

7. You have established procedures to comply with the Bulletin B-091 as of April 1st, 2003, using the transitional provisions.

8. With respect to your computer systems, you do not wish to change both the existing one and its replacement. This would require twice the resources and extra cost, the benefit of which would be lost on the system to be replaced.

9. Modifications to the existing system would delay the construction of its replacement, which is already behind schedule.

10. The existing system is somewhat stable but your Director of Information Services informed you that a significant change such as GST/HST could be problematic. This is a risk you cannot afford to take and it would save you time and money if you could make the changes for both, the prepaid funeral and cemetery arrangements at the same time.

11. You undertake to make the necessary changes as expeditiously as possible and we have your assurance that you are working to complete the new system as quickly as possible, as the existing system will become unstable and unsupportable in the foreseeable future.

Ruling Requested

Having regard to the above-mentioned issues, combined with the fact that you will not be finished with the construction, testing and implementation of the new system by XXXXX, you request that you be permitted to continue to follow the transitional provisions as outlined on page 11 in Bulletin B-091 to apply until the time your new system has been modified and fully implemented.

Ruling Given

Based on the facts set out above, we rule that XXXXX may continue to use the transitional rules outlined on page 11 in Bulletin B-091, Timing of the Application of the GST/HST to Prepaid Funeral Arrangements, until the earlier of its fiscal year end of XXXXX, or the time your new system has been modified and fully implemented.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 957-8223.

Yours truly,

Carolle Mercier
Services and Intangibles Unit
General Operations & Border Issues Division
Excise and GST/HST Rulings Directorate