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GST Considerations For New Business Owners

The Goods 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 can be found at. Subject to certain exceptions, all companies are required to charge GST Website India online, currently at 5%, plus applicable provincial sales tax return. 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. These are referred to as Input Tax Credits.

Does Your Business Need to Register?

Prior to engaging in any kind of business 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, are required to charge GST, except in the following circumstances:

Estimated sales for that business for 4 consecutive calendar quarters is expected turn out to be less than $30,000. Revenue Canada views these businesses as small suppliers and consequently 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. a business 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 is able to claim Input Breaks (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 chance competitive advantage achieved from not charging the GST, as well as the additional administrative costs (hassle) from needing to file returns.