The Goods and Services Tax or GST is a consumption tax which 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 taxation’s. 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 back to their business activities. These people are referred to as Input Tax Breaks.
Does Your Business Need to Sign up for?
Prior to going into any kind of economic activity in Canada, all business owners need to see how the GST and relevant provincial taxes apply to that company. Essentially, all businesses that sell Goods and Service Tax Application in India Online and services in Canada, for profit, should always charge GST, except in the following circumstances:
Estimated sales for that business for 4 consecutive calendar quarters is expected to get 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 many others.
Although a small supplier, i.e. an individual with annual sales less than $30,000 is not must file for GST, in some cases it is good do so. Since a business could only claim Input Breaks (GST paid on expenses) if tend to be registered, many businesses, particularly in the start up phase where expenses exceed sales, may find oftentimes able to recover a significant amount taxes. This is balanced against the potential competitive advantage achieved from not charging the GST, this substance additional administrative costs (hassle) from in order to file returns.