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 positioned. Subject to certain exceptions, all businesses 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 are also permitted to claim the taxes paid on expenses incurred that relate to their business activities. The particular referred to as Input Tax Credit cards.

Does Your Business Need to Register?

Prior to participating in any kind of business activity in Canada, all business owners need to determine how the GST and relevant provincial taxes apply to the group. Essentially, all businesses that sell goods and services in Canada, for profit, have to charge GST Registration Online in India, 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. an online-business with annual sales less than $30,000 is not expected to file for GST, in some cases it is beneficial to do so. Since a business could only claim Input Breaks (GST paid on expenses) if considerable registered, many businesses, particularly in start off up phase where expenses exceed sales, may find oftentimes able to recover a significant quantity of taxes. This has to be balanced against prospective competitive advantage achieved from not charging the GST, plus the additional administrative costs (hassle) from having to file returns.