GST Considerations For New Business Owners

The Goods and Service Tax Registration in India Online 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 can be found at. 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 required taxes and remitting them on a periodic basis. Businesses additionally permitted to claim the taxes paid on expenses incurred that relate to their business activities. Components referred to as Input Tax Credit cards.

Does Your Business Need to Ledger?

Prior to going into any kind of economic activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to these guys. 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 become 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 and a lot more.

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