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 can be found at. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales taxation’s. 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 thus to their business activities. These are referred to as Input Tax Credit cards.
Does Your Business Need to Register?
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 them. Essentially, all businesses that sell goods and services in Canada, for profit, should charge GST, except in the following circumstances:
Estimated sales for that business for 4 consecutive calendar quarters is expected to get 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 numerous others.
Although a small supplier, i.e. an online-business with annual sales less than $30,000 is not required to file for www GST Gov in Login Online India, in some cases it is beneficial to do so. Since a business is able to 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 are able to recover a significant amount of taxes. This really balanced against the opportunity competitive advantage achieved from not charging the GST, as well as the additional administrative costs (hassle) from needing to file returns.
