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 is available. 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 taxes and remitting them on a periodic basis. Businesses will also permitted to claim the taxes paid on expenses incurred that relate inside their business activities. These are referred to as Input Tax Credit cards.
Does Your Business Need to Register?
Prior to going into any kind of economic activity in Canada, all business owners need to determine how the GST and relevant provincial taxes apply to these guys. 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 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 a lot more.
Although a small supplier, i.e. an individual with annual sales less than $30,000 is not required to file for GST Registration in India, in some cases it is beneficial to do so. Since a business can merely 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 possibly they are able to recover a significant involving taxes. This have to be balanced against likely competitive advantage achieved from not charging the GST, as well as the additional administrative costs (hassle) from in order to file returns.