GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax which charged on most Goods and Service Tax Registration in India Online and services sold within Canada, regardless of where your business is situated. 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 back to their business activities. The particular referred to as Input Tax Credits.

Does Your Business Need to Sign up for?

Prior to joining any kind of business activity in Canada, all business owners need to see how the GST and relevant provincial taxes apply to these guys. 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 be able to 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 and a lot more.

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