The Goods and Services Tax or GST is a consumption tax much more charged on most Goods and service Tax Online Registration in India and services sold within Canada, regardless of where your business is located. 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 required taxes and remitting them on a periodic basis. Businesses likewise permitted to claim the taxes paid on expenses incurred that relate back to their business activities. These are referred to as Input Tax Credit cards.

Does Your Business Need to Ledger?

Prior to participating in any kind of economic activity in Canada, all business owners need to figure out how the GST 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 get less than $30,000. Revenue Canada views these businesses as small suppliers usually 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 had to have to file for GST, in some cases it is good 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 the start up phase where expenses exceed sales, may find that they are able to recover a significant amount taxes. This has to be balanced against likely competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from in order to file returns.