The Goods and Services Tax or GST is a consumption tax which charged on most Goods and service Tax Online Registration in India 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, 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 likewise permitted to claim the taxes paid on expenses incurred that relate of their business activities. Components referred to as Input Tax Breaks.
Does Your Business Need to Ledger?
Prior to getting yourself into any kind of commercial 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, have to charge GST, except in the following circumstances:
Estimated sales for the business for 4 consecutive calendar quarters is expected to be less than $30,000. Revenue Canada views these businesses as small suppliers and are also 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, in some cases it is beneficial to do so. Since a business could only claim Input Breaks (GST paid on expenses) if tend to be registered, many businesses, particularly in start off up phase where expenses exceed sales, may find that they will be able to recover a significant amount of taxes. This is balanced against prospective competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from having to file returns.