The Goods and Service Tax Registration in India Online and Services Tax or GST is a consumption tax with this increasing charged on most goods and services sold within Canada, regardless of where your business is situated. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales taxes. A business effectively acts as an agent for Revenue Canada by collecting the taxes and remitting them on a periodic basis. Businesses will also permitted to claim the taxes paid on expenses incurred that relate of their business activities. These people are referred to as Input Tax Credit.
Does Your Business Need to File?
Prior to joining any kind of commercial activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to them. Essentially, all businesses that sell goods and services in Canada, for profit, have 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 a lot more.
Although a small supplier, i.e. a business with annual sales less than $30,000 is not must file for GST, in some cases it is good do so. Since a business is able to claim Input Breaks (GST paid on expenses) if they are registered, many businesses, particularly in start off up phase where expenses exceed sales, may find that they are able to recover a significant quantity of taxes. This is balanced against the potential competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from to be able to file returns.