Page 52 - F6 Slide - Taxation - Lecture Day 2
P. 52
Goods In Transit
• A taxpayer is allowed to deduct the cost of
purchases on the earlier of incurring or payment.
• This means that when a taxpayer incurs the
expense a deduction is allowed even if the goods
are still in transit.
• If the goods are still in transit but not in stock it
means that the closing stock is not added back
resulting in the receiver of revenue loosing .
• Hence an anti-avoidance provision.
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