23 December 2002 GST/HST Ruling 41414 - GST/HST Status of Service Supplied by a Registered Charity

Dear XXXXX:

Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transaction described below. We apologize for the delay in responding.

Statement of Facts

Based upon your letter and subsequent clarification provided by telephone XXXXX our understanding of the facts, the transaction, and the purpose of the transaction is as follows:

XXXXX is a registered charity. Its function is to perform XXXXX services consisting of XXXXX the bodies of deceased XXXXX persons, covering them in plain cloth shrouds, and saying prayers for the deceased.

The deceased's body is received from place of death (e.g. hospital) and a team of XXXXX volunteers performs a XXXXX service as follows:

•   All extraneous matter is removed from the body, such as nail polish or medical devices.

•   The body is completely washed with soap.

•   A cloth shroud is placed around the body and sewn up with thread.

•   The volunteers recite prayers over the body by candlelight and place it in a casket that is not supplied by the charity.

•   The casket containing the shrouded body is then immediately transported to its final resting place. If burial is to take place the following day, volunteers take turns sitting with the body so that it is never left unattended.

•   The service is supplied only XXXXX, as needed. The ritual is required prior to burial XXXXX[.]

•   Special cloth and thread for the shrouds are purchased new and imported from one non-resident supplier, subject to normal duties and taxes. The deceased's representative cannot supply any other material for this purpose.

•   The shroud is an integral component of the ritual, and it would not otherwise be supplied to anyone for any other purpose.

•   The approximate cost of a shroud for an adult body is XXXXX.

•   The cost of soap and candles used during the XXXXX is approximately XXXXX and incidental to providing the service.

•   Currently, the XXXXX is provided for no consideration, but the deceased's representative is asked to donate any amount to help defray the total cost of providing this service. No official receipts are issued for these donations.

Ruling Requested

Whether XXXXX services performed by the volunteers of the charity for little or no consideration (equal to or less than the estimated total cost of supply) is exempt under section 1 of Part V.1 of Schedule V to the Excise Tax Act (ETA).

Ruling Given

Based on the facts set out above, we rule that the XXXXX service supplied by the charity is exempt from GST/HST under section 1 of Part V.1 of Schedule V to the ETA, since this endeavour is not one of the specific exclusions listed there under.

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 ETA, or to our interpretative policy; and that you have fully described all necessary facts and the transaction 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) 946-7962.

Yours truly,

Gudrun Ahsmann, C.G.A.
Charities, Non-Profit Organizations, and Educational Services Unit
Public Service Bodies and Governments Division
Excise and GST/HST Rulings Directorate