GST Considerations For New Business Owners

The Goods and Services Tax or GST Website India online 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 income taxes. A business effectively acts as an agent for Revenue Canada by collecting the required 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. These people are referred to as Input Tax Credit cards.

Does Your Business Need to Register?

Prior to going into any kind of commercial activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to both of them. Essentially, all businesses that sell goods and services in Canada, for profit, have to 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 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 etc.

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 beneficial to do so. Since a business in a position to claim Input Tax credits (GST paid on expenses) if tend to be registered, many businesses, particularly in the start up phase where expenses exceed sales, may find that they will be able to recover a significant amount taxes. This have to be balanced against the potential competitive advantage achieved from not charging the GST, this substance additional administrative costs (hassle) from to be able to file returns.