What is a Goods and Services Tax?

The Goods and Services Tax are applicable to the visitors in Canada. It generally bears the acronym GST and it is different from HST (Harmonized Service Tax). GST is generally on the goods purchased and the services that are availed by the various visitors in Canada. The Goods and Service Tax is charged up to 5% in Canada. Harmonized Sales Tax or HST is the 5% GST that is in addition to an 8% retail sales tax in provinces of Canada such as the Labrador, Nova Scotia, etc.

Thus the HST is pertained only to some specific provinces of the country. There are some allowed exceptions that escape the Goods and Service Tax and such goods are the basic grocery items, drugs, goods that are exported, etc. Such exceptional goods are termed as zero-rate goods in Canada.

Territorial, provincial governments are not subject to GST always. There are some businesses that are branded as small scale suppliers, and such small suppliers will not have to charge taxes on the goods and services. There are registration procedures for charging this GST/HST. The procedures need to be carried on with the Canada Revenue Agency.

If a person or an organization is not qualified to be a proprietor i.e. a small supplier, the GST needs to be charged necessarily in Canada. According to legislation a person has the rights to claim for what is called as the Input Tax Credit for the GST that has been paid by the person on the goods that are used or consumed.

It is not a rule that every business needs to register for Goods and Service Tax. For example say a person wins bread by teaching lessons for students, or services for child care need not obviously register for GST/HST in Canada. Non profited, service oriented organizations get qualified as small suppliers only if their annual taxable revenues come up to $50,000 or less, before any expenses. There are a few exceptions regarding these small suppliers too.

These exceptional suppliers need to register for GST/HST if they are occupied with jobs like taxi operation, selling of admissions to seminars, etc. Bodies that register for Goods and Service Tax will naturally have quite a lot of benefits, the main benefit being that the GST (a part of the amount) that has been invested so far on the taxes can be claimed to be returned to the body.

There are specifications on when to do the registration for GST and procedures for how to do the registration with the revenue agency. The registration procedure is time saving and very easy. It can be either done online or on the telephone. An application is to be filed at the Canada Revenue Agency and the request for the issue of the registration number needs to be placed. After the number is issued, it is to be used for all invoices and many such documents. Registration is just a matter of a single day after which the person or the organization can start collecting GST/HST. What is Goods and Services Tax?

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