GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax that is charged on most Goods and Service Tax Registration in India Online and services sold within Canada, regardless of where your business is available. Subject to certain exceptions, all companies 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 taxes and remitting them on a periodic basis. Businesses furthermore permitted to claim the taxes paid on expenses incurred that relate of their business activities. The particular referred to as Input Tax Credit cards.

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Prior to joining any kind of commercial activity in Canada, all business owners need to determine how the GST and relevant provincial taxes apply to them. Essentially, all businesses that sell goods and services in Canada, for profit, should always charge GST, except in the following circumstances:

Estimated sales for that 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 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 many others.

Although a small supplier, i.e. a business with annual sales less than $30,000 is not must file for GST, in some cases it is good do so. Since a business can merely 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 amount of taxes. This ought to balanced against prospective competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from needing to file returns.