Commonwealth Numbered Regulations

1994 No. 82 CUSTOMS REGULATIONS (AMENDMENT) - REG 3

3.1 After regulation 107, insert:

Prescribed costs of factory labour-section 153F of the Act

"107A. For the purposes of subsection 153F (1) of the Act, each of the
following costs, to the extent that the cost relates to labour, is prescribed:

   (a)  the cost of wages and employee benefits;

   (b)  the cost of supervision and training;

   (c)  the cost of management of the process of manufacture;

   (d)  the cost of receipt and storage of materials;

   (e)  the cost of quality control;

   (f)  the cost of packing of goods into inner containers;

   (g)  the cost of handling and storage of goods within the factory.

Prescribed costs of factory overheads-section 153G of the Act

"107B. (1) For the purposes of subsection 153G (1) of the Act, each of the
following costs is prescribed:

   (a)  the cost of inspection and testing of materials and goods;

   (b)  the cost of insurance of the following kinds:

        (i)    insurance of plant, equipment and materials used in the
               production of the goods;

        (ii)   insurance of work in progress and finished goods;

        (iii)  liability insurance;

        (iv)   accident compensation insurance;

        (v)    insurance against consequential loss from accident to plant and
               equipment;

   (c)  the cost of dies, moulds, tooling and the depreciation, maintenance
        and repair of plant and equipment;

   (d)  the cost of interest payments for plant and equipment;

   (e)  the cost of research, development, design and engineering;

   (f)  the cost of the following items in respect of real property used in
        the production of the goods:

        (i)    insurance;

        (ii)   rent and leasing;

        (iii)  mortgage interest;

        (iv)   depreciation on buildings;

        (v)    maintenance and repair;

        (vi)   rates and taxes;

   (g)  the cost of leasing of plant and equipment;

   (h)  the cost of energy, fuel, water, lighting, lubricants, rags and other
        materials and supplies not directly incorporated in manufactured
        goods;

   (i)  the cost of storage of goods at the factory;

   (j)  the cost of royalties or licences in respect of patented machines or
        processes used in the manufacture of the goods or in respect of the
        right to manufacture the goods;

   (k)  the cost of subscriptions to standards institutions and industry and
        research associations;

   (l)  the cost of the provision of medical care, cleaning services, cleaning
        materials and equipment, training materials and safety and protective
        clothing and equipment;

   (m)  the cost of the disposal of non-recyclable waste;

   (n)  the cost of subsidisation of a factory cafeteria to the extent not
        recovered by returns;

   (o)  the cost of factory security;

   (p)  the cost of computer facilities allocated to the process of
        manufacture of the goods;

   (q)  the cost of contracting out part of the manufacturing process within
        Australia or New Zealand;

   (r)  the cost of employee transport;

   (s)  the cost of vehicle expenses;

   (t)  the cost of any tax in the nature of a fringe benefits tax.



"(2) In working out a cost for the purposes of subregulation (1), the
following costs are not included:

   (a)  any cost or expense relating to the general expense of doing business
        (including, but not limited to, any cost or expense relating to
        insurance or to executive, financial, sales, advertising, marketing,
        accounting or legal services);

   (b)  the cost of telephone, mail and other means of communication;

   (c)  the cost of international travel expenses, including fares and
        accommodation;

   (d)  the cost of the following items in respect of real property used by
        persons carrying out administrative functions:

        (i)    insurance;

        (ii)   rent and leasing;

        (iii)  mortgage interest;

        (iv)   depreciation on buildings;

        (v)    maintenance and repair;

        (vi)   rates and taxes;

   (e)  the cost of conveying, insuring or shipping the goods after
        manufacture;

   (f)  the cost of shipping containers or packing the goods into shipping
        containers;

   (g)  the cost of any royalty payment relating to a licensing agreement to
        distribute or sell the goods;

   (h)  the manufacturer's profit and the profit or remuneration of any
        trader, agent, broker or other person dealing in the goods after
        manufacture;

   (i)  any other cost incurred after the completion of manufacture of the
        goods.



"(3) For the purposes of paragraphs (1) (c) and (f), the cost of depreciation
of plant, equipment or buildings must be worked out in accordance with
generally accepted accounting principles, as applied by the manufacturer.".