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 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 required taxes and remitting them on a periodic basis. Businesses will also permitted to claim the taxes paid on expenses incurred that relate to their business activities. The particular referred to as Input Tax Credit.

Does Your Business Need to Sign up for?

Prior to going into any kind of business activity in Canada, all business owners need to see how the GST Portal Login Online India and relevant provincial taxes apply to both of them. Essentially, all businesses that sell goods and services in Canada, for profit, should 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 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 etc.

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