GST Considerations For New Business Owners

The Goods 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 located. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales property taxes. 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 to their business activities. These people are referred to as Input Tax Breaks.

Does Your Business Need to Register?

Prior to getting yourself into any kind of business activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to both of them. Essentially, all businesses that sell Goods and Service Tax Application in India Online and services in Canada, for profit, really should try to charge GST, except in the following circumstances:

Estimated sales for your business for 4 consecutive calendar quarters is expected to be able to less than $30,000. Revenue Canada views these businesses as small suppliers and are also 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 many others.

Although a small supplier, i.e. an individual with annual sales less than $30,000 is not must file for GST, in some cases it is good do so. Since a business could only claim Input Breaks (GST paid on expenses) if considerable registered, many businesses, particularly in the start up phase where expenses exceed sales, may find them to be able to recover a significant quantity taxes. This is balanced against prospective competitive advantage achieved from not charging the GST, as well as the additional administrative costs (hassle) from having to file returns.