The Goods and Services Tax or GST is a consumption tax which isn't charged on most goods and services sold within Canada, regardless of where your business is situated. Subject to certain exceptions, all companies 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 taxes and remitting them on a periodic basis. Businesses are also permitted to claim the taxes paid on expenses incurred that relate back to their business activities. These people are referred to as Input Tax Credit.
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Prior to going into any kind of commercial activity in Canada, all business owners need to figure out 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 your business for 4 consecutive calendar quarters is expected turn out to be 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 individual 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 can only claim Input Tax credits (GST paid on expenses) if considerable registered, many businesses, particularly in the start up phase where expenses exceed sales, may find that possibly they are able to recover a significant quantity taxes. This have to be balanced against likely competitive advantage achieved from not charging the GST Application Online in India, provided additional administrative costs (hassle) from having to file returns.