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 can be found at. 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 required 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. The particular referred to as Input Tax Credit.
Does Your Business Need to Ledger?
Prior to joining any kind of business activity in Canada, all business owners need to figure out how the GST Online Registration in India and relevant provincial taxes apply to both of them. 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 a lot more.
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 beneficial to do so. Since a business in a position to claim Input Tax credits (GST paid on expenses) if they are 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 is balanced against the potential competitive advantage achieved from not charging the GST, as well as the additional administrative costs (hassle) from having to file returns.