Zero Rated

A term relating to value added tax (VAT). It refers to goods (For  example, food and/or books)  which are taxable but at a zero rate.  The significance of this rating is that businesses selling such goods may claim back their input tax (the VAT which they have paid to thier suppliers).  Businesses which provide goods and services which are VAT exempt (for example, stamps and postal services) are not able to reclaim input tax.

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