GST Considerations For New Business Owners

The Goods and service Tax Online Registration in India and Services Tax or GST is a consumption tax that is charged on most goods and services sold within Canada, regardless of where your business is located. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales taxes. A business effectively acts as an agent for Revenue Canada by collecting the taxes and remitting them on a periodic basis. Businesses furthermore permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. The particular referred to as Input Tax Credit cards.

Does Your Business Need to File?

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

Estimated sales for your business for 4 consecutive calendar quarters is expected to become less than $30,000. Revenue Canada views these businesses as small suppliers usually 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 many 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 in a position to claim Input Breaks (GST paid on expenses) if considerable registered, many businesses, particularly in start off up phase where expenses exceed sales, may find oftentimes able to recover a significant amount taxes. This has to be balanced against likely competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from to be able to file returns.