Did you know that your inventory spend is not always deductible? One of the most common mistakes that we see our clients make is assuming that all of your inventory spend is deductible. According to the GST Department, if you produce, purchase, or sell merchandise, in your business, you must keep an inventory and use an accrual method for purchases and sales of merchandise. In simpler terms, your inventory is nondeductible for accounting or tax purposes until it is actually sold!