TS Burstow Funerals Pty Ltd - s.87B undertaking

TS Burstow Funerals Pty Ltd (Burstows) operate a benefit fund to cater for pre-paid funerals. As a result of New Tax Changes information provided by the ATO at seminars prior to the GST introduction, Burstows saw an opportunity to re-negotiate existing contracts of its fund members in order to upgrade the funeral services provided and to cater for incidental expenses not considered or covered in the initial contracts. After further information from the ATO it was realised that the review process undertaken by Burstows ultimately exposed its fund members to the immediate imposition of GST on services that would not have attracted the tax until the service was provided if the existing contracts had not been reviewed/renegotiated. The matter was brought to the Commission's attention by Ian MacFarlane MP. MacFarlane and Burstows agreed to a rectification process and MacFarlane involved the Commission to ensure that the agreed resolution would be implemented by Burstows. Burstows have undertaken to:

• appoint an independent accountant to audit the Burstows Funeral Benefits Trust Fund;
• identify and reinstate contracts that were re-drawn or re-negotiated;
• advise all affected clients of the error in re-drawing contracts;
• provide refunds to clients that have paid an amount for GST prior to the funeral service being provided;
• provide a copy of the Accountant's audit report to the Commission and advise when all resolution action has been completed;
• take all necessary action by the end of September 2000.