GST Considerations For New Business Owners
The Goods and Services Tax or GST is a consumption tax that is charged on most goods and services sold within Canada, regardless of where your business can be found at. 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 taxes and remitting them on a periodic basis. Businesses furthermore permitted to claim the taxes paid on expenses incurred that relate of their business activities. These people are referred to as Input Tax Credits.
Does Your Business Need to Ledger?
Prior to getting yourself into any kind of business activity in Canada, all business owners need to determine how the GST and relevant provincial taxes apply to both of them. Essentially, all businesses that sell goods and services in Canada, for profit, should always 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. an online-business with annual sales less than $30,000 is not expected to file for GST, in some cases it is good do so. Since a business in a position to 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 that they will be able to recover a significant involving taxes. This really balanced against the potential competitive advantage achieved from not charging the GST Registration Online in India, this substance additional administrative costs (hassle) from needing to file returns.
