Defining GST/HST

GST/HST is a 5% tax applicable on most goods or services. Some things such as essential food items and some real estate services. Once you exceed the small supplier threshold, $30,000, you need to register your GST/HST account number. This number is your business number, including your payroll, corporate income tax, and import-export accounts. 

Working of GST/HST

The GST/HST operates on the principles of the input/output system. When a taxpayer buys goods or services, the taxpayer pays GTS/HST. This process is known as input tax. And when the same taxpayer sells products, the taxpayer collects GST/HST from the buyer. This process is called output tax. The taxpayer then subtracts the input tax from the output tax and remits the difference to their tax authority. 

Do you have to register for GST/HST number?

Many people linked with the business world ask this question, they should do the GST/HST registration process. You need to register for GST/HST number at a specific time. So one needs to register and at what time. Such queries need an immediate solution to avoid any confusion. 

Who needs to register?

You might know that most people in Canada are self-employed, freelancers, or probably own some business in Canada. The sole proprietors, contractors, small business owners, and entrepreneurs. So as a business owner, you must know that there is a specific income limit, below which you don’t need to get registered for GST/HST. 

When to register

There is a specific income limit, below which you don’t need to register for GST/HST. This limit is called ‘Small Supplier Threshold,’ which is $30,000 per year. The time limit refers to four consecutive calendar quarters. If your income exceeds $30,000, you are then obliged to register for GST/HST account number. 

Why I need to register for GST/HST number

You don’t have any other choice about whether to register or not. Once you cross the small supplier threshold, the Government won’t notify you on the onset. The CRA continues to assess your bills, and all these bills will be considered inclusive of HST/GST. If you register for GTS/HST, it can save you from interests and penalties that you have to pay later on. Furthermore, it will protect you from any loss (13%) of your sales. Contact your bookkeeping expert to file your taxes quickly and efficiently to avoid such inconvenience. 

Final Words!

Please don’t rely on the Government officials that they will send you some notification to register for GST/HST. People frequently don’t bother to write even when they exceed their income limit, $30,000. The consequences of such negligence are pretty expensive. First, you have to pay extra money in the form of interest. Being an entrepreneur, you need to register for GST/HST account number if you make taxable sales in Canada.