What Is a GST Number and Why Do You Need One?

A Goods and Services Tax (GST) number is a unique identifier for businesses registered to collect and remit the Goods and Services Tax (GST) and Harmonized Sales Tax (HST) in Canada. This number allows the Canadian government to track sales tax collected and paid by businesses. The number’s fundamental purpose is to facilitate the administration of consumption taxes on most goods and services sold across Canada.

The GST is a 5% federal tax applied nationwide. The HST combines this federal GST with a provincial sales tax, creating a single rate in participating provinces. Businesses registered for GST/HST collect this tax from consumers at the point of sale. They then remit these amounts to the Canada Revenue Agency (CRA), the federal tax authority. The GST number is therefore central to ensuring compliance with these tax obligations and maintaining transparency in commercial transactions.

When a GST Number is Required

A business generally needs a GST number if it provides taxable supplies in Canada and is not a “small supplier.” A small supplier is a business whose total worldwide taxable supplies, including zero-rated supplies, do not exceed $30,000 in a single calendar quarter or over the most recent four consecutive calendar quarters. For public service bodies like charities, colleges, hospitals, and non-profit organizations, this threshold is $50,000.

If a business exceeds the $30,000 small supplier threshold in a single calendar quarter, it must begin charging GST/HST on the sale that caused it to exceed the threshold. The business must then register for GST/HST within 29 days after that sale. If the threshold is exceeded over four consecutive calendar quarters, the business must register and begin charging GST/HST from the end of the month following the quarter in which the threshold was exceeded.

Even if a business does not meet the mandatory registration threshold, voluntary registration is an option. This can be advantageous because only registered businesses can claim Input Tax Credits (ITCs). ITCs allow businesses to recover the GST/HST paid on purchases and expenses related to their commercial activities, which can lead to cost savings. For example, a new business anticipating growth might register voluntarily to claim ITCs on initial setup costs.

Sole proprietorships, partnerships, and corporations all follow the general small supplier rules. Non-resident businesses supplying goods and services in Canada are also generally required to register if they provide taxable supplies and are not small suppliers.

Information Needed to Obtain a GST Number

Before initiating the formal registration process for a GST number, gathering all necessary information and documents is a preparatory step to ensure a smooth and accurate application. Businesses should have their legal name, any operating or trade name, and both their physical and mailing addresses readily available. This foundational business information is crucial for accurate identification within the tax system. This includes:

Business type (sole proprietorship, partnership, or corporation).
Business Number (BN) for existing businesses.
Social Insurance Number (SIN) for sole proprietors.
Contact person details, including name, title, and telephone number.
Business’s fiscal year end.
Bank account information for direct deposit or debit.
Estimate of expected taxable sales for the upcoming year.
Brief description of goods or services provided.

The official GST/HST registration form, such as Form RC1, is accessible on the government’s tax agency website.

The Process of Registering for a GST Number

The process of registering for a GST number begins with submitting the completed application to the tax authority. The most common and quickest method is through the online portal, the Business Registration Online (BRO) service.

To register online, individuals typically need their Social Insurance Number and basic business information. The online process is generally straightforward and efficient, often resulting in the GST/HST number being issued within a few business days, or even instantly in some cases. A confirmation receipt is usually provided after online submission.

Businesses can also register by mail by sending the completed Form RC1 to the designated tax center. This method typically involves longer processing times, ranging from several weeks to a few months. Another option is to register by phone, though this may require navigating automated systems before speaking to a representative.

After the application is submitted, the tax authority processes the request. Upon approval, the GST number is issued, typically via email or mail. Businesses should retain this confirmation. If there are any issues with the application, the tax authority may contact the designated contact person for clarification.

Using Your GST Number

Once a business obtains its GST number, it gains the ability to collect and remit the Goods and Services Tax (GST) or Harmonized Sales Tax (HST), incurring ongoing obligations. The GST number must be prominently displayed on invoices issued to customers for taxable supplies. This ensures transparency and allows customers to verify the correct tax is being charged.

A benefit of having a GST number is the ability to claim Input Tax Credits (ITCs). ITCs allow businesses to recover the GST/HST paid on purchases and expenses incurred for their commercial activities. For example, if a business pays GST/HST on office supplies, rent, or utilities, it can claim these amounts back, reducing its net tax remittance. These ITCs are typically claimed on the GST/HST return for the period in which the expenses were incurred.

Businesses must file regular GST/HST returns, reporting the GST/HST collected from sales and the ITCs claimed on purchases. The frequency of filing depends on the business’s annual taxable supplies. Businesses with $1,500,000 or less in annual taxable supplies generally file annually, with returns due three months after their fiscal year-end. Those with annual taxable supplies between $1,500,000 and $6,000,000 typically file quarterly, with returns due one month after the end of the reporting period. Businesses exceeding $6,000,000 in annual taxable supplies usually file monthly, also with returns due one month after the period end.

Maintaining accurate and detailed records of all sales, expenses, GST/HST collected, and ITCs claimed is important for compliance. These records support the figures reported on GST/HST returns and are necessary in the event of an audit by the tax authority. Many businesses utilize accounting software to streamline the tracking and reporting of these tax-related transactions.