GST Considerations For New Business Owners

The Goods and Services Tax or GST Registration Online in India 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 businesses 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 required taxes and remitting them on a periodic basis. Businesses additionally permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. Components referred to as Input Tax Breaks.

Does Your Business Need to Register?

Prior to engaging in any kind of economic 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, really should try to charge GST, except in the following circumstances:

Estimated sales for the 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 many others.

Although a small supplier, i.e. a business with annual sales less than $30,000 is not had to have to file for GST, in some cases it is good do so. Since a business can merely claim Input Breaks (GST paid on expenses) if may possibly registered, many businesses, particularly in the start up phase where expenses exceed sales, may find oftentimes able to recover a significant amount of taxes. This have to be balanced against the potential competitive advantage achieved from not charging the GST, this substance additional administrative costs (hassle) from needing to file returns.