ATO Interpretative Decision

ATO ID 2001/434 (Withdrawn)

Goods and Services Tax

GST and variation to a pre-arranged funeral plan
FOI status: may be released

This ATO ID is withdrawn on the basis that a precedential view exists. The ATO view for this issue is covered in The Funeral Industry - Printed as M111

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the entity, a funeral parlour, making a GST-free supply under subsection 15(2) of the A New Tax System (Goods and Services Tax Transition) Act 1999 (Transition Act), when it provides funeral services after 30 June 2000, under a funeral agreement that was entered into before 1 December 1999 and there is a variation to the venue for the pre-arranged funeral plan after 1 December 1999?

Decision

Yes, the entity is making a GST-free supply under subsection 15(2) of the Transition Act, when it provides funeral services after 30 June 2000, under a funeral agreement that was entered into before 1 December 1999 and there is a variation to the venue for the pre-arranged funeral plan after 1 December 1999.

Facts

The entity is a funeral parlour. The entity supplies pre-arranged funeral plans. The entity entered into an agreement for the funeral before 1 December 1999. The entity receives consideration for the funeral plan before 1 July 2005. The entity provides the funeral service after 1 July 2000. There is a variation in the venue for the pre-arranged funeral after 1 December 1999. The entity does not charge an additional cost for this variation.

The entity is registered for the Goods and Services Tax (GST).

Reasons for Decision

Subsection 15(2) of the Transition Act provides that if an entity enters into an agreement for the provision of a funeral before 1 December 1999, the supply of a funeral under that agreement is GST-free to the extent that the consideration is paid before 1 July 2005 and the funeral is provided on or after 1 July 2000.

Subsection 15(2) of the Transition Act does not apply where the parties to the agreement vary a pre-arranged funeral agreement after 1 December 1999 and as a result, a new agreement is created. However, a variation that has no affect on the supply identified in the agreement or the consideration identified in the agreement does not result in a new agreement.

Where an agreement for a pre-arranged funeral is entered into before 1 December 1999 and at a later date a different venue is substituted for no additional cost, the essential character of the supply of a funeral service, identified in the agreement, has not varied. As the consideration remains unchanged, it is the ATO view that no variation has occurred.

Therefore, the entity is making a GST-free supply under subsection 15(2) of the Transition Act, when it provides funeral services after 30 June 2000, under a funeral agreement that was entered into before 1 December 1999 and there is a variation to the venue for the pre-arranged funeral plan after 1 December 1999.

Date of decision: 1 April 2001

Legislative References:
A New Tax System (Goods and Services Tax Transition) Act 1999
subsection 15(2)

Other References:
The Funeral Industry (issued 14/02/01)

Keywords
Goods and services tax
GST-free
GST transitional issues
Special transitional rules

Business Line: Goods and Services Tax

Date of publication: 11 October 2001

ISSN: 1445-2782

history

	Date:	Version:
	1 April 2001	Original statement
You are here	23 December 2005	Archived

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