The Goods and Services Tax or GST is a consumption tax much more 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 income taxes. 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 back to their business activities. Components referred to as Input Tax Credit.
Does Your Business Need to Sign up for?
Prior to getting yourself into any kind of business 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 Service Tax Registration in India Online and services in Canada, for profit, are required to charge GST, except in the following circumstances:
Estimated sales for your business for 4 consecutive calendar quarters is expected to be 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 numerous others.
Although a small supplier, i.e. an online-business with annual sales less than $30,000 is not expected to file for GST, in some cases it is good do so. Since a business can merely claim Input Breaks (GST paid on expenses) if may possibly registered, many businesses, particularly in start off up phase where expenses exceed sales, may find them to be able to recover a significant amount taxes. This has to be balanced against likely competitive advantage achieved from not charging the GST, plus the additional administrative costs (hassle) from in order to file returns.