GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax much more 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 tax return. A business effectively acts as an agent for Revenue Canada by collecting the required taxes and remitting them on a periodic basis. Businesses are also permitted to claim the taxes paid on expenses incurred that relate to their business activities. These are referred to as Input Tax Breaks.

Does Your Business Need to Ledger?

Prior to participating in any kind of commercial activity in Canada, all business owners need to see how the GST and relevant provincial taxes apply to that company. Essentially, all businesses that sell goods and services in Canada, for profit, are required to charge GST Online Registration in India, except in the following circumstances:

Estimated sales for your business for 4 consecutive calendar quarters is expected turn out to be 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 had to have 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 tend to be registered, many businesses, particularly in start off up phase where expenses exceed sales, may find them to be able to recover a significant quantity taxes. This is balanced against likely competitive advantage achieved from not charging the GST, plus the additional administrative costs (hassle) from to be able to file returns.