If you sell taxable goods or supply taxable services you must register for GST once your sales exceed $30,000 in any four quarter period. The Canada Revenue Agency will deem you or your company to be registered if your income reaches this threshold and will assume the GST is collected and is included in your revenue. Once you are registered for GST, you must charge GST on all of your taxable sales.
You may also register for GST before you have reached the $30,000 in sales, however you must charge GST on all sales at that time.
As a GST registrant, you are eligible to claim the GST you have paid on your commercial activities and supplies. These are called GST Input Tax Credits, or “GST ITC’s”. To be able to claim a GST ITC, it must meet prescribed documentation requirements and must be claimed within prescribed time period.
The documentation requirements for invoicing your clients/customers are as follows:
| ITC Documentation Requirements | For purchases under $30 |
For purchases under $150 |
For purchases over $150 |
| Total charge | Yes | Yes | Yes |
| Supplier name | Yes | Yes | Yes |
| Supplier GST number | No | Yes | Yes |
| Amount of GST/HST | No | Yes | Yes |
| Purchaser name | No | No | Yes |
| Description & terms | No | No | Yes |
Once you are registered, you are required to file GST returns either monthly, quarterly or annually. Filing deadlines for monthly and quarterly returns is one month after the end of the reporting period. The filing deadline for an annual filer is three months after the fiscal year-end.
The GST you have collected on your sales will be reduced by your eligible GST ITC’s. If the amount you collected is greater than the GST ITC’s, then you will have an amount owing. If it is not, you will receive a refund.
If the Canada Revenue Agency was to review your claim and you could not provide the appropriate documentation, they will deny your claim for the GST ITC’s. The prescribed time period to claim GST ITC’s is generally 4 years.
For more information: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/menu-eng.html