GST Considerations For New Business Owners

The Goods and Services Tax or GST Registration Online in India is a consumption tax that is charged on most goods and services sold within Canada, regardless of where your business can be found at. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales taxes. A business effectively acts as an agent for Revenue Canada by collecting the required taxes and remitting them on a periodic basis. Businesses likewise permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. These people are referred to as Input Tax Snack bars.

Does Your Business Need to Sign up for?

Prior to getting yourself into any kind of business activity in Canada, all business owners need to determine how the GST and relevant provincial taxes apply to both of them. Essentially, all businesses that sell goods and services in Canada, for profit, are required 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. a 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 is able to claim Input Tax credits (GST paid on expenses) if these kinds of are registered, many businesses, particularly in the start up phase where expenses exceed sales, may find oftentimes able to recover a significant amount of taxes. This is balanced against chance competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from to be able to file returns.