Rule 7 - Calculation of Qualifying Value Content - Customs Tariff (Determination of Origin of Goods under the India-Australia Economic Cooperation and Trade Agreement) Rules, 2022

7. Calculation of Qualifying Value Content .- (1) Where a qualifying value content requirement is specified in these rules, including related Annexures, to determine whether a good is originating, the qualifying value content shall be calculated using one of the following methods, namely:- (a) Build-Down Formula : based on the value of non-originating materials [𝑸𝑽𝑪 = 𝑭𝑶𝑩 𝑽𝒂𝒍𝒖𝒆 𝑽𝒂𝒍𝒖𝒆 𝒐𝒇 𝑵𝒐𝒏 𝑶𝒓𝒊𝒈𝒊𝒏𝒂𝒕𝒊𝒏𝒈 𝒎𝒂𝒕𝒆𝒓𝒊𝒂𝒍𝒔 / 𝑭𝑶𝑩 𝑽𝒂𝒍𝒖𝒆 = 𝒙 𝟏𝟎𝟎] (b) Build-up Formula: based on the value of originating materials [𝑸𝑽𝑪 = 𝑽𝒂𝒍𝒖𝒆 𝒐𝒇 𝑶𝒓𝒊𝒈𝒊𝒏𝒂𝒕𝒊𝒏𝒈 𝒎𝒂𝒕𝒆𝒓𝒊𝒂𝒍𝒔 / 𝑭𝑶𝑩 𝑽𝒂𝒍𝒖𝒆 = 𝒙 𝟏𝟎𝟎] (2) All values for the purposes of calculating qualifying value content shall be determined in accordance with the Customs Valuation Agreement. (3) All costs shall be recorded and maintained in conformity with the Generally Accepted Accounting Principles applicable in the territory of a Party where the good is produced. (4) If a non-originating material is used in the production of a good, the following may be added to the value of originating materials in determining whether the good meets the QVC requirement,- (a) the value of production of the non-originating materials undertaken in the territory of one or both Parties; and (b) the value of originating materials used in the production of the non-originating material in the territory of one or both Parties by one or more producers. (5) The value of the materials used in production shall be,- (a) for imported materials, the CIF value; (b) for materials obtained within the territory of a Party,- (i) the price paid or payable by the producer in the Party where the producer is located; (ii) the value as determined for an imported material in clause (a); or (iii) the earliest ascertainable price paid or payable in the territory of the Party; and (c) for materials that are self-produced, all the costs incurred in the production of the material, which includes general expenses. (6) For originating materials, the following expenses may be added to the value of the material, if not included under sub-rule (5),namely :- (a) the costs of freight, insurance, packing, and other transport-related costs incurred in transporting the good to the location of the producer of the good; (b) duties, taxes, and customs brokerage fees on the material, paid in the territory of a Party, other than duties that are waived, refunded, refundable, or otherwise recoverable, which includes credit against duty or tax paid or payable; and (c) the cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap or by-product. (7) For non-originating materials or materials of undetermined origin, the following expenses may be deducted from the value of the material, namely :- (a) the costs of freight, insurance, packing, and other transport-related costs incurred in transporting the good to the location of the producer of the good; (b) duties, taxes, and customs brokerage fees on the material, paid in the territory of a Party, other than duties that are waived, refunded, refundable, or otherwise recoverable, which includes credit against duty or tax paid or payable; and (c) the cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap or by-product. (8) Where the expenses listed in sub-rules (5) to (7) are unknown or evidence is not available, then no adjustment is allowed for those costs.