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 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 taxes and remitting them on a periodic basis. Businesses furthermore permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. These people are referred to as Input Tax Credits.

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Prior to participating in any kind of commercial 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 Portal Login Online India, 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 and 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 and many others.

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