Calculation of the cost of materials received at a factory
153E Calculation of the cost of materials received at a factory
Purpose of section
This section sets out, for the purposes of sections 153C and 153D, the rules for working out the cost of materials in the form they are received at a factory.
General rule
Subject to this section, the cost of materials received at a factory is the amount paid or payable by the manufacturer in respect of the materials in the form they are so received.
Customs and excise duties and certain other taxes to be disregarded
Any part of the cost of materials in the form they are received at a factory that represents:
a customs or excise duty; or
a tax in the nature of a sales tax, a goods and services tax, an anti‑dumping duty or a countervailing duty;
imposed on the materials by a country in the qualifying area is to be disregarded.
Comptroller‑General of Customs may require artificial elements of cost to be disregarded
If the Comptroller‑General of Customs is satisfied that preference claim goods consist partly of materials added or attached solely for the purpose of artificially raising the allowable factory cost of the goods, the Comptroller‑General of Customs may, by written notice given to the importer of the preference claim goods, require the part of that cost that is, in the opinion of the Comptroller‑General of Customs, reasonably attributable to those materials, to be disregarded.
Comptroller‑General of Customs may require cost over normal market value to be disregarded
If the Comptroller‑General of Customs is satisfied that the cost to the manufacturer of materials in the form they are received at a factory exceeds, by an amount determined by the Comptroller‑General of Customs, the normal market value of the materials, the Comptroller‑General of Customs may, by written notice given to the importer of preference claim goods in which those materials are incorporated, require the excess to be disregarded.
Comptroller‑General of Customs may determine cost of certain materials received at a factory
If the Comptroller‑General of Customs is satisfied:
that materials in the form they are received at a factory are so received:
free of charge; or
at a cost that is less than the normal market value of the materials; and
that the receipt of the materials free of charge or at a reduced cost has been arranged, directly or indirectly, by a person who will be the importer of preference claim goods in which those materials are incorporated;
the Comptroller‑General of Customs may, by written notice given to the importer, require that an amount determined by the Comptroller‑General of Customs to be the difference between the cost, if any, paid by the manufacturer and the normal market value be treated as the amount, or a part of the amount, paid by the manufacturer in respect of the materials.
Effect of determination
If the Comptroller‑General of Customs gives a notice to the importer of preference claim goods under subsection (4), (5) or (6) in respect of materials incorporated in those goods, the cost of the materials to the manufacturer must be determined having regard to the terms of that notice.
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