GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax which charged on most goods and services sold within Canada, regardless of where your business is located. Subject to certain exceptions, all businesses are required to charge GST Registration in India, currently at 5%, plus applicable provincial sales property 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 inside their business activities. These are referred to as Input Tax Credits.

Does Your Business Need to File?

Prior to going into any kind of commercial activity in Canada, all business owners need to see how the GST and relevant provincial taxes apply to these guys. Essentially, all businesses that sell goods and services in Canada, for profit, should charge GST, except in the following circumstances:

Estimated sales for the 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 and a lot more.

Although a small supplier, i.e. organization 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 in a position to claim Input Breaks (GST paid on expenses) if tend to be registered, many businesses, particularly in the start up phase where expenses exceed sales, may find oftentimes able to recover a significant quantity of taxes. This ought to balanced against the potential competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from to be able to file returns.