The Goods and Services Tax or GST is a consumption tax with this increasing charged on most goods and services sold within Canada, regardless of where your business is located. Subject to certain exceptions, all companies 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 are also permitted to claim the taxes paid on expenses incurred that relate to their business activities. These are referred to as Input Tax Credit.
Does Your Business Need to Sign up for?
Prior to going into any kind of business activity in Canada, all business owners need to figure out how the GST Application Online in India and relevant provincial taxes apply to the group. Essentially, all businesses that sell goods and services in Canada, for profit, should charge GST, except in the following circumstances:
Estimated sales for your 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 many others.
Although a small supplier, i.e. organization with annual sales less than $30,000 is not required to file for GST, in some cases it is good do so. Since a business can merely claim Input Tax credits (GST paid on expenses) if considerable registered, many businesses, particularly in start off up phase where expenses exceed sales, may find that they will be able to recover a significant involving taxes. This has to be balanced against the potential competitive advantage achieved from not charging the GST, this substance additional administrative costs (hassle) from to be able to file returns.