GST Considerations For New Business Owners

The Goods and Service Tax Application 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 companies are required to charge GST, currently at 5%, plus applicable provincial sales tax return. A business effectively acts as an agent for Revenue Canada by collecting the taxes and remitting them on a periodic basis. Businesses are also permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. Components referred to as Input Tax Credit.

Does Your Business Need to File?

Prior to participating in any kind of economic activity in Canada, all business owners need to see how the GST and relevant provincial taxes apply to the group. 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 the 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. organization with annual sales less than $30,000 is not required to file for GST, in some cases it is good do so. Since a business can only claim Input Breaks (GST paid on expenses) if these kinds of are registered, many businesses, particularly in the start up phase where expenses exceed sales, may find that possibly they are able to recover a significant involving taxes. This ought to balanced against the opportunity competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from needing to file returns.