GST Considerations For New Business Owners

The Goods and service Tax Online Registration in India 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 positioned. 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 furthermore permitted to claim the taxes paid on expenses incurred that relate back to their business activities. Tend to be some referred to as Input Tax Credits.

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Prior to engaging in any kind of business 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, except in the following circumstances:

Estimated sales for the business for 4 consecutive calendar quarters is expected to be less than $30,000. Revenue Canada views these businesses as small suppliers and perhaps they 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. an individual with annual sales less than $30,000 is not required 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 may possibly registered, many businesses, particularly in start off up phase where expenses exceed sales, may find that they will be able to recover a significant involving taxes. This really balanced against prospective competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from needing to file returns.