GST Considerations For New Business Owners

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 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 will also permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. These are referred to as Input Tax Breaks.

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Prior to joining any kind of commercial activity in Canada, all business owners need to see how the GST and relevant provincial taxes apply to them. Essentially, all businesses that sell Goods and Services Tax Registration in India Online and services in Canada, for profit, really should try to charge GST, except in the following circumstances:

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

Although a small supplier, i.e. a booming enterprise 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 Tax credits (GST paid on expenses) if tend to be registered, many businesses, particularly in start off up phase where expenses exceed sales, may find them to be able to recover a significant amount of taxes. This has to be balanced against chance competitive advantage achieved from not charging the GST, this substance additional administrative costs (hassle) from having to file returns.