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 available. Subject to certain exceptions, all businesses are required to charge GST Registration in India, currently at 5%, plus applicable provincial sales property taxes. 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. Components referred to as Input Tax Credits.
Does Your Business Need to File?
Prior to participating in any kind of economic activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to these guys. Essentially, all businesses that sell goods and services in Canada, for profit, should charge GST, except in the following circumstances:
Estimated sales for that business for 4 consecutive calendar quarters is expected to become 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 many 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 in a position to claim Input Tax credits (GST paid on expenses) if they are registered, many businesses, particularly in the start up phase where expenses exceed sales, may find them to be able to recover a significant involving taxes. This has to be balanced against prospective competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from to be able to file returns.
