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Dear Tutor, In an ACCA practice question, a machne was acquired duirng a given year; however, in calculating the cost of the machine, including the transportation costs, the sale tax is specifically excluded. The question also notes that the company has registered for the sale tax. May I know what is meant by the registartion for sale tax and why the sale tax is excluded from the cost of machine?
If you want to ask the tutor something you should ask at the ask the tutor forum.The reason sales tax will likely be excluded in above case is because generally companies registered for sales tax are effectively allowed to recover input sales tax suffered.Value Added Tax would probably be best known example of this process.
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