GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax much more charged on most Goods and Service Tax Registration in India Online and services sold within Canada, regardless of where your business is positioned. Subject to certain exceptions, all companies are required to charge GST, currently at 5%, plus applicable provincial sales tax return. A business effectively acts as an agent for Revenue Canada by collecting the required taxes and remitting them on a periodic basis. Businesses likewise permitted to claim the taxes paid on expenses incurred that relate back to their business activities. Tend to be some referred to as Input Tax Credit.

Does Your Business Need to Register?

Prior to participating in any kind of economic activity in Canada, all business owners need to determine how the GST and relevant provincial taxes apply to both of them. Essentially, all businesses that sell goods and services in Canada, for profit, should always charge GST, except in the following circumstances:

Estimated sales for that business for 4 consecutive calendar quarters is expected turn out to be less than $30,000. Revenue Canada views these businesses as small suppliers and consequently are therefore exempt.

The business activity is GST exempt. Exempt goods and services includes residential land and property, child care services, most health and medical services numerous others.

Although a small supplier, i.e. an individual with annual sales less than $30,000 is not required to file for GST, in some cases it is beneficial to do so. Since a business could only claim Input Tax credits (GST paid on expenses) if considerable registered, many businesses, particularly in the start up phase where expenses exceed sales, may find that they are able to recover a significant quantity taxes. This have to be balanced against likely competitive advantage achieved from not charging the GST, this substance additional administrative costs (hassle) from to be able to file returns.