If you start a business, you will one day need to start charging GST on your products. Once you start charging it, you will also need to start doing remittances based off the schedule you have chosen. Like most things with the CRA, GST has many moving parts and rules. This post will only cover the basic rules of when to start charging GST on your products. If you are confused by GST and if you need to charge it, your bookkeeping professional will be able to help.
When do you need to start charging GST?
GST does not need to be charged by your company if one of the two situations applies:
You sell only exempt supplies
You are a small supplier.
Those two criteria might not mean too much to you as a business owner trying to figure out if you need to charge GST.
Exempt supplies are defined by the CRA here. There are too many to be listed on this post, some examples of it are legal aid services, music lessons, and most health services performed by licensed professionals.
A small supplier is a business that has taxable sales that are less than $30,000 in four consecutive calendar quarters. The minute you cross over this threshold you must register for GST. If you remain below the $30,000 you can voluntarily chose to apply for and remit GST, but it is not a requirement.
How do you register for GST?
You can register for GST one of three ways:
Business Registration Online, you can find information here
Submitting form RC1
Calling the CRA at 1-800-959-5525
Once you have determined that you need to start charging GST, you must pick a reporting period. This means the frequency with which you need to file a GST return and remit the amount owing to the government. The period you may choose is based on your income. Below is a chart from the CRA website on your options for reporting period.
Annual taxable supplies threshold amounts
Assigned reporting period
Optional reporting periods
$1,500,000 or less
More than $1,500,000 up to $6,000,000
More than $6,000,000
While annually does seem an attractive option if you qualify, there are a couple things you need to consider. The first is that it does not get you out of remitting money quarterly. If you owed more than $3,000 in the previous year in GST, you will need to make quarterly installments. If you neglect to make these installments, the CRA will charge you interest on your GST owed when you file if it is again over the $3,000.
When do you need to file?
It is important to ensure that you are filing and paying your GST on time. If you do not, the CRA will charge you interest and penalties and in extreme cases can even take money out of your bank account to cover the amounts owing.
The following is a chart for when you need to file & pay your GST by:
3 months after period end. For example, December period end, GST is due March 31
Due the end of the next month after period end. For example, March period end, GST is due April 30.
Due the end of the next month after period end. For example, January period end, GST is due February 28.
For more information, you can check out the CRA website here.