The Goods and Service Tax Registration in India Online 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 tax return. A business effectively acts as an agent for Revenue Canada by collecting the taxes and remitting them on a periodic basis. Businesses additionally permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. Tend to be some referred to as Input Tax Credits.

Does Your Business Need to Sign up for?

Prior to participating in any kind of economic activity in Canada, all business owners need to see how the GST and relevant provincial taxes apply to them. Essentially, all businesses that sell goods and services in Canada, for profit, should always 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 perhaps 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 many others.

Although a small supplier, i.e. a booming enterprise 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 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 amount of 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.