GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax with this increasing charged on most goods and services sold within Canada, regardless of where your business is available. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales taxation’s. A business effectively acts as an agent for Revenue Canada by collecting the taxes and remitting them on a periodic basis. Businesses will also permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. These are referred to as Input Tax Credit.

Does Your Business Need to Register?

Prior to getting yourself into any kind of commercial 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 Service Tax Application in India Online and services in Canada, for profit, really should try to charge GST, except in the following circumstances:

Estimated sales for your business for 4 consecutive calendar quarters is expected to be less than $30,000. Revenue Canada views these businesses as small suppliers and are also 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. a business with annual sales less than $30,000 is not had to have to file for GST, in some cases it is good do so. Since a business in a position to claim Input Tax credits (GST paid on expenses) if considerable registered, many businesses, particularly in start off up phase where expenses exceed sales, may find them to be able to recover a significant amount of taxes. This has to be balanced against prospective competitive advantage achieved from not charging the GST, plus the additional administrative costs (hassle) from to be able to file returns.