GST Considerations For New Business Owners

The Goods and Service Tax Registration in India Online 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 positioned. Subject to certain exceptions, all businesses 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 additionally permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. These are referred to as Input Tax Credit cards.

Does Your Business Need to Ledger?

Prior to getting yourself 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, should always charge GST, 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 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 numerous others.

Although a small supplier, i.e. a booming enterprise with annual sales less than $30,000 is not had to have to file for GST, in some cases it is beneficial to do so. Since a business could only 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 that they will be able to recover a significant amount taxes. This really balanced against the potential competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from having to file returns.