Document ID: chunk:federal_register_of_legislation:C2004A04684:body:0:p16
Version: federal_register_of_legislation:C2004A04684
Segment Type: other
Provision Reference: 
Character Range: 39008–41928

1A OF PART VIII

DIAGRAM 1

      Decision diagram for working out whether preference claim goods are the produce or manufacture of New Zealand

SCHEDULE 1—continued

DIAGRAM 2

       An example of possible inputs into goods last processed in New Zealand and claimed to be the manufacture of that country

    [An explanation of the calculations to determine whether the goods are properly so claimed appears in the notes to the diagram.]

              Plant 4 materials $105 (Allowable expenditure on materials nil)
              Plant 5 materials $25 (Allowable expenditure on materials $5)
              Plant 6 materials $45 (Allowable expenditure on materials $45)
              NZ labour $60
              NZ o'heads $20

SCHEDULE 1—continued

Notes relating to diagram 2

Goods imported into Australia after last process in the factory (ie Plant 7) are claimed to be the manufacture of New Zealand. This claim will be correct if the allowable factory cost of these preference claim goods is at least 50% of their total factory cost.

To work out both of these factory costs, we must first work out the allowable expenditure of the factory on the 3 manufactured materials that make up the preference claim goods. We will also need to take into account 3 other amounts, namely the total expenditure of the factory on materials, and the allowable expenditure of the factory on labour, and on overheads.

Working out allowable expenditure on materials (see section 153D)

 • The allowable expenditure of the factory on particular manufactured materials in the form they are received from Plant 4 is nil because the materials are imported from outside the qualifying area (ie Hong Kong). (See subsection 153D(2)). This is so even though the manufactured materials themselves incorporate goods originating inside the qualifying area (ie Plant 1 in Australia).

 • The allowable expenditure of the factory on particular manufactured materials in the form they are received from Plant 5 is not $25 but $5. This is because:

    — the cost of contributing materials imported into the qualifying area from outside that area (ie Plant 2 in Italy) and subsequently processed is excluded under subsection 153D(4) from the working out of that allowable expenditure; and

  — subsection 153D(6) does not apply.

 • The allowable expenditure of the factory on particular manufactured materials in the form they are received from Plant 6 is the full cost to the manufacturer of $45. It is true that contributing materials are imported into the qualifying area from outside that area (ie Plant 3 in Fiji) and subsequently processed. However, the cost of those contributing materials is not required to be excluded under subsection 153D(4) from the working out of that allowable expenditure because subsection 153D(6) applies.

SCHEDULE 1—continued

Working out allowable factory cost (see section 153B)

Allowable expenditure