1. What is GST in Canada?

The Goods and Services Tax (GST) is a 5% value-added tax that applies to most goods and services sold or provided in Canada. It's a federal tax collected by the Canada Revenue Agency (CRA).

2. How Does the Calculator Work?

The calculator uses the simple GST formula:

Where:

• \( Amount \) — The pre-tax amount in Canadian dollars
• \( 0.05 \) — The GST rate (5%)

Explanation: The calculation multiplies the amount by 5% (0.05) to determine the GST amount.

3. Importance of GST Calculation

Details: Accurate GST calculation is essential for businesses to properly charge and remit taxes, and for consumers to understand the tax component of their purchases.

4. Using the Calculator

Tips: Enter the pre-tax amount in Canadian dollars. The amount must be a positive number. The calculator will compute the 5% GST amount.

5. Frequently Asked Questions (FAQ)

Q1: Is GST the same across all of Canada?
A: GST is federal. Some provinces combine it with PST into HST, but this calculator only computes the 5% federal GST.

Q2: What items are exempt from GST?
A: Basic groceries, prescription drugs, and certain medical devices are GST-exempt.

Q3: How often must businesses remit GST?
A: It depends on annual revenue - monthly, quarterly, or annually.

Q4: Can I claim GST credits?
A: Low-income individuals may qualify for GST/HST credit payments.

Q5: When did GST start in Canada?
A: The GST was introduced on January 1, 1991.