The Goods and Services Tax or GST is a consumption tax which isn’t 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 taxes. A business effectively acts as an agent for Revenue Canada by collecting the taxes and remitting them on a periodic basis. Businesses likewise permitted to claim the taxes paid on expenses incurred that relate to their business activities. These are referred to as Input Tax Breaks.
Does Your Business Need to Sign up for?
Prior to getting yourself into any kind of economic activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to that company. Essentially, all businesses that sell goods and services in Canada, for profit, really should try to charge GST, except in the following circumstances:
Estimated sales for your business for 4 consecutive calendar quarters is expected to get less than $30,000. Revenue Canada views these businesses as small suppliers and they 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. an online-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 could only 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 that possibly they are able to recover a significant involving taxes. This ought to balanced against the opportunity competitive advantage achieved from not charging the GST Application Online in India, and the additional administrative costs (hassle) from having to file returns.