GST Considerations For New Business Owners

The Goods 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 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 thus to their business activities. These people are referred to as Input Tax Breaks.

Does Your Business Need to Sign up for?

Prior to participating in any kind of business activity in Canada, all business owners need to determine how the GST Online Registration in India and relevant provincial taxes apply to both of them. Essentially, all businesses that sell goods and services in Canada, for profit, really should try to charge GST, except in the following circumstances:

Estimated sales for that business for 4 consecutive calendar quarters is expected to get less than $30,000. Revenue Canada views these businesses as small suppliers and perhaps they 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 many others.

Although a small supplier, i.e. an online-business with annual sales less than $30,000 is not expected to file for GST, in some cases it is good do so. Since a business can merely claim Input Tax credits (GST paid on expenses) if may possibly registered, many businesses, particularly in start off up phase where expenses exceed sales, may find them to be able to recover a significant involving taxes. This has to be balanced against the opportunity competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from to be able to file returns.