GST Considerations For New Business Owners

The Goods and Service Tax Application in India Online and Services Tax or GST is a consumption tax which isn’t charged on most goods and services sold within Canada, regardless of where your business is available. Subject to certain exceptions, all companies are required to charge GST, currently at 5%, plus applicable provincial sales income 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 back to their business activities. The particular referred to as Input Tax Credit cards.

Does Your Business Need to Register?

Prior to participating 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 always charge GST, except in the following circumstances:

Estimated sales for that business for 4 consecutive calendar quarters is expected to be able to 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 numerous others.

Although a small supplier, i.e. an online-business with annual sales less than $30,000 is not must file for GST, in some cases it is beneficial to do so. Since a business can merely claim Input Breaks (GST paid on expenses) if these kinds of are registered, many businesses, particularly in the start up phase where expenses exceed sales, may find that possibly they are able to recover a significant quantity of taxes. This is balanced against the opportunity competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from having to file returns.