ATO ID 2002/26: GST and repatriation of a deceased person
Date of decision: 5 November 2001
Business line: Indirect Tax

Issue
Is the entity, a funeral parlour operator, making a GST-free supply under Subdivision 38-E of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it supplies a repatriation service together with a casket to a non-resident in the course of repatriating a deceased person?

Decision
Yes, the entity is making a GST-free supply under Subdivision 38-E of the GST Act when it supplies a repatriation service together with a casket to a non-resident in the course of repatriating a deceased person.

Facts
The entity is a funeral parlour operator that is located in Australia. The entity contracts with a non-resident to repatriate a deceased person. The repatriation service that the entity provides includes: As part of this service, the entity also provides a casket for the actual transportation of the body. This service is undertaken from the entity's premises in Australia. The non-resident's representative visited Australia to formalise the agreement between the entity and the non-resident. However, the representative is not in Australia when the actual repatriation service is performed. The various components of the repatriation service that the entity provides are not specifically identified on the invoice. One amount for the overall service, including the casket, transportation and various other services, is shown on the invoice. The entity invoices the non-resident on the same day that the body is shipped overseas. No consideration is received for the supply prior to issuing the invoice. The entity is registered for goods and services tax (GST).

Reasons for decision
Summary: Subdivision 38-E of the GST Act provides that some exports and other supplies for consumption outside of Australia may be GST-free. The export of goods is dealt with under section 38-185 of the GST Act and supplies of things other than goods or real property, for consumption outside of Australia, is covered by section 38-190 of the GST Act. Therefore, in order to identify the applicable section of the GST Act, it is necessary to determine whether the entity is making supplies of goods, or supplies of something other than goods or real property. The overall supply that the entity makes, in fact, consists of two supplies. One is the supply of the repatriation service, which includes the preparation of the body, organising the appropriate documentation and the transportation of the body to the airport. This is the supply of something other than goods or real property and therefore must be examined in the context of section 38-190 of the GST Act. The other supply is the supply of the casket. This is a supply of goods and needs to be examined under section 38-185 of the GST Act. Section 38-190 of the GST Act Under paragraph (a) of item 2 in the table in subsection 38-190(1) (Item 2) of the GST Act, a supply, other than goods or real property, made to a non-resident is GST-free if: The supply of the repatriation services is not directly connected with real property in Australia and the non-resident is not in Australia when the supply is made. Therefore, it needs to be determined whether any of the services provided by the entity amount to work physically performed on goods situated in Australia. The question is whether the body is 'goods' for the purposes of the GST Act. The term 'goods' is defined in section 195-1 of the GST Act to mean 'any form of tangible personal property'. A human body awaiting burial is not considered to be goods as defined in section 195-1 of the GST Act. Support for this position can be found in the High Court decision in Doodeward v Spence [1908] 6 CLR 406, where Griffith J states that a human body is only capable by law of becoming the subject of property when: 'a person has by the lawful exercise of work or skill so dealt with a human body or part of a human body in his lawful possession that it has acquired some attributes differentiating it from a mere corpse awaiting burial, he acquires a right to retain possession of it, at least as against any person not entitled to have it delivered to him for the purposes of burial, but subject, of course, to any positive law which forbids its retention under the particular circumstances.' The embalming services that the entity performs on the body do not change the attributes of the body from being a corpse awaiting burial. Therefore, the body has not become the subject of property and is not considered to be goods for the purposes of the GST Act. Accordingly, the repatriation service that the entity provides is not a service of work physically performed on goods situated in Australia when the work is done. Therefore, the supply of the repatriation service which includes the preparation of the body, organising the appropriate documentation and the transportation of the body to the airport is GST-free under paragraph (a) of Item 2. Section 38-185 of the GST Act Under item 1 in the table in subsection 38-185(1) (Item 1) of the GST Act, a supply of goods is GST-free if the supplier exports the goods within 60 days after: the day on which the supplier receives any of the consideration for the supply; or if, on an earlier day, the supplier gives an invoice for the supply - the day on which the supplier gives the invoice. The entity invoices the non-resident on the same day that the body is shipped overseas. No consideration for the supply is received prior to issuing the invoice. Therefore, paragraph (b) of Item 1 applies. As the casket is shipped overseas on the same day that the entity invoices the client, the casket is exported within 60 days after the entity gives the invoice for the supply. Accordingly, the supply of the casket is a GST-free supply under paragraph (b) of Item 1. Conclusion In summary, the entity is making a GST-free supply under Subdivision 38-E of the GST Act when it supplies a repatriation service together with a casket to a non-resident. The supply of the repatriation service is GST-free under item 2 of subsection 38-190(1) of the GST Act, and the supply of the casket is GST-free under item 1 of subsection 38-185(1) of the GST Act.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 Subdivision 38-E section 38-185 subsection 38-185(1) subsection 38-185 table item 1 subsection 38-185 table item 1 paragraph (b) section 38-190 subsection 38-190 table item 2 subsection 38-190 table item 2 paragraph (a) section 195-1
Case references: Doodeward v Spence [1908] 6 CLR 406
Subject references: Goods & services tax Exports Export of goods GST free