Issue
Is the entity, a supplier of funeral services, 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, entered into before 1 December 1999 with the deceased, and receives full consideration for the services before 1 July 2005?
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, entered into before 1 December 1999 with the deceased, and receives full consideration for the services before 1 July 2005.
Facts
The entity is a supplier of funeral services. The entity entered into a funeral agreement with the deceased before 1 December 1999. The deceased died after 30 June 2000. The entity provides the funeral services as detailed in the funeral agreement. The entity receives full consideration for the services before 1 July 2005.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Subsection 15(2) of the Transition Act provides that if an entity enters into an agreement before 1 December 1999 to provide a funeral and the funeral is provided on or after 1 July 2000, the supply is GST-free to the extent that the consideration for the supply is paid before 1 July 2005.
The entity entered into a funeral agreement with the deceased before 1 December 1999. It provides the funeral services as detailed in the funeral agreement after 30 June 2000; and receives full payment for the funeral services before 1 July 2005.
Therefore, the entity is making a GST-free supply under subsection 15(2) of the Transition Act when it supplies the funeral services under the agreement with the deceased.