The Goods and Services Tax or GST is a consumption tax with this increasing 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 taxation’s. A business effectively acts as an agent for Revenue Canada by collecting the taxes and remitting them on a periodic basis. Businesses likewise permitted to claim the taxes paid on expenses incurred that relate back to their business activities. Tend to be some referred to as Input Tax Credit cards.
Does Your Business Need to Register?
Prior to joining any kind of business activity in Canada, all business owners need to see how the GST Registration in India and relevant provincial taxes apply to them. 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 your 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 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 numerous others.
Although a small supplier, i.e. an online-business with annual sales less than $30,000 is not required to file for GST, in some cases it is beneficial to do so. Since a business can only claim Input Tax credits (GST paid on expenses) if they are registered, many businesses, particularly in start off up phase where expenses exceed sales, may find that they will be able to recover a significant involving taxes. This has to be balanced against the potential competitive advantage achieved from not charging the GST, as well as the additional administrative costs (hassle) from needing to file returns.