Do I deduct GST paid on expenses from GST collected to calculate the GST I owe for my business?

It's my first year dealing with GST for my proprietorship. I've input the amount I collected, but I don't know if the GST I've paid on my expenses (ie. office supplies) should be deducted from that to create the total amount I actually owe.

457

Returning Member

Apr 27, 2023 4:48:03 PM

Thank you for your question.

The Canada Revenue Agency (CRA) asserts that:

As a GST/HST registrant, you recover the GST/HST paid or payable on your purchases and expenses related to your commercial activities by claiming input tax credits (ITCs).

You may be eligible to claim ITCs only to the extent that your purchases and expenses are for consumption, use, or supply in your commercial activities.

To claim an ITC, the expenses or purchases must be reasonable in quality, nature, and cost in relation to the nature of your business.

For more helpful information please click on the CRA website link - Input Tax Credits

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Do I deduct GST paid on expenses from GST collected to calculate the GST I owe for my business?