Commonwealth Numbered Acts

BOUNTY (COMPUTERS) ACT 1984 No. 113 of 1984 - SECT 6

6. (1) For the purposes of this Act, the value added to bountiable equipment
by a manufacturer of the equipment shall be deemed to be the amount that is
the factory cost incurred by the manufacturer-

   (a)  in connection with the process or processes in the manufacture of the
        equipment that was or were carried out by the manufacturer at premises
        registered under section 20 in the name of the manufacturer; or

   (b)  in preparing for, or arranging, the carrying out at
        registered premises by another manufacturer of the equipment of a
        process or processes in the manufacture of the equipment.

(2) For the purposes of this Act, where, in an accounting period of a
manufacturer of bountiable equipment, the manufacturer-

   (a)  meets expenditure on research and development in Australia; or

   (b)  incurs system design and system engineering costs in Australia, in
        respect of bountiable equipment of a kind that is, or is likely to be,
        manufactured in Australia by the manufacturer, the factory cost
        incurred by the manufacturer in that period in connection with the
        process or processes in the manufacture of bountiable equipment
        carried out at registered premises shall include that expenditure or
        those costs, as the case may be, but no other factory cost shall
        include that expenditure or those costs, as the case may be.

(3) For the purposes of this Act, where in an accounting period of a
manufacturer of bountiable equipment, the manufacturer receives from the
Commonwealth, from a State or from an authority of the Commonwealth or of a
State a grant in respect of the manufacture of, research relating to, or the
development of, bountiable equipment of a particular kind, the factory cost
incurred by the manufacturer in that period in connection with the process or
processes in the manufacture of bountiable equipment of that kind carried out
at registered premises shall be reduced by the amount of that grant.

(4) For the purposes of this Act, the factory cost in connection with
processes in the manufacture of bountiable equipment includes factory overhead
charges (including rent, hire or leasing costs in relation to factory
buildings, plant or equipment) apportioned on the basis of a full accounting
period of the manufacturer of the equipment.

(5) For the purposes of this Act, the factory cost incurred by a manufacturer
in connection with processes in the manufacture of bountiable equipment does
not include-

   (a)  the cost (including the cost of wastage) of parts or materials
        delivered into the store of the manufacturer, being parts or materials
        supplied to the manufacturer for incorporation in the equipment or in
        the packaging of the equipment;

   (b)  the cost of any parts or materials (whether manufactured or produced
        by the manufacturer or otherwise and whether or not imported into
        Australia) that, if they were imported into Australia otherwise than
        while incorporated in bountiable equipment and were goods to which
        section 19, but not sub-section 21 (4), of the Tariff Act applied,
        would be goods in respect of which duty of Customs would be payable at
        a rate of duty that exceeds 2%;

   (c)  the cost of any process in the manufacture carried out by a person
        other than the manufacturer or a person employed by the manufacturer
        at premises registered under section 20 in the name of the
        manufacturer, not being a process by way of design, research or
        development carried out in Australia on behalf of the manufacturer;

   (d)  costs of general administration (other than factory administration),
        including, where the manufacturer is a body corporate, corporate
        expenses;

   (e)  selling and service charges;

   (f)  sales tax in respect of completed equipment;

   (g)  tax on income, other than tax on income deducted in respect of the
        wages, salaries or other remuneration of employees;

   (h)  costs (including costs of development and production) of software,
        other than operating software or software for testing hardware in
        Australia;

   (j)  costs incurred after the completion of the manufacture of the
        equipment, other than costs of, or relating to, the testing or packing
        (excluding the cost of packaging) of the equipment at
        registered premises;

   (k)  without limiting paragraph (j), the commissioning and installation of
        completed equipment for the intended user of the equipment, whether or
        not the user is the manufacturer;

   (m)  the value of perquisites provided to employees of the manufacturer
        (including, where the manufacturer is a body corporate, staff of that
        body corporate) that does not form part of their taxable income;

   (n)  profit;

   (p)  bonuses paid out of profits;

   (q)  costs charged or levied on the manufacturer by an associate of the
        manufacturer that are not costs actually incurred by the associate;

   (r)  interest, other than interest on money borrowed from another person
        for the purpose of financing-

        (i)    bought-in material and stock;

        (ii)   work in progress;

        (iii)  research and development, other than research and development
               in Australia relating to software that is not
               operating software or software for testing hardware; or

        (iv)   the purchase of production plant, production equipment, or
               factory buildings, owned by the manufacturer;

   (s)  depreciation of buildings, other than depreciation at a rate of 4% per
        annum, or, if another rate is prescribed, that other rate, on the
        historic cost of factory buildings owned by the manufacturer;

   (t)  depreciation of machinery, plant or equipment, other than depreciation
        of machinery, plant or equipment owned by the manufacturer that is
        depreciation allowed by the Commissioner of Taxation for the purposes
        of a law of the Commonwealth relating to taxation;

   (u)  losses incurred on the sale or other disposal of buildings, machinery,
        plant or equipment;

   (w)  long service leave, other than provision for such leave;

   (x)  severance pay, other than severance pay in relation to service during
        a period that is within the bounty period and during which the
        manufacturer was a manufacturer of bountiable equipment; and

   (y)  freight, and costs relating to vehicles, incurred in respect of the
        delivery of completed equipment.

(6) Where, in relation to a claim for bounty or to a return in accordance with
section 16 or otherwise for the purposes of this Act, the Comptroller-General-

   (a)  is unable to verify the value added to bountiable equipment by a
        manufacturer; or

   (b)  forms the opinion that, having regard to sound accounting principles,
        costs included in factory cost by reference to which the value added
        to bountiable equipment by a manufacturer is ascertained-

        (i)    are incorrect or overestimated;

        (ii)   are higher than would have been the case if the manufacturer
               had not marginally costed or similarly disproportionately
               costed the manufacture of goods in respect of which bounty is
               not payable;

        (iii)  have been fixed in order to obtain an increase in bounty;

        (iv)   are unduly higher than similar costs incurred by other
               manufacturers of similar equipment;

        (v)    have been increased as the result of the influence of a
               relationship between the manufacturer and an associate of the
               manufacturer; or

        (vi)   are higher than would have been the case if the manufacturer
               had provided services that were provided, and charged for, by
               an associate of the manufacturer, the Comptroller-General may,
               by instrument signed by him or her, determine the value added
               to that bountiable equipment by that manufacturer, being the
               value that, having regard to all relevant circumstances, the
               Comptroller-General considers to be appropriate, and the value
               added to that bountiable equipment by that manufacturer shall,
               for the purposes of this Act, be the value so determined.

(7) For the purposes of this Act, where a manufacturer of bountiable equipment
manufactures bountiable equipment from other equipment in respect of which-

   (a)  bounty under this Act; or

   (b)  bounty within the meaning of the Automatic Data Processing Equipment
        Bounty Act 1977, has become payable (whether or not it has been paid),
        the value added to that first-mentioned bountiable equipment by the
        manufacturer does not include any value added to the other equipment
        by the manufacturer.