Does imported fabric still qualify?
Under section 153NA of the Customs Act 1901, goods are the manufacture of an LDC if the last process of manufacture happens there and allowable factory cost is at least 50% of total factory cost. Allowable cost includes labour and overheads in Nepal and materials from the LDC qualifying area, which includes Australia and developing countries; but materials from developing countries that are not LDCs (China is one) count only up to 25% of total factory cost. Materials from countries outside the qualifying area count for nothing. For a garment made from Chinese fabric, qualifying therefore depends on Nepali labour and overheads plus the capped 25% reaching 50%, so we confirm per HS line and per style. Australian Border Force (source: Preferential Rules of Origin – guide to claiming preferential rates under non-FTA arrangements (LDC rule, s153NA; 25% cap on non-LDC developing-country materials), opens in a new tab)
What you receive and use at import
- A manufacturer’s declaration, which can be written on the commercial invoice, describing the goods and referring to the relevant provision of Division 1A of Part VIII of the Customs Act. No official certification is required; a GSP Form A with the invoice is an acceptable alternative. Australian Border Force (source: Preferential Rules of Origin – guide to claiming preferential rates under non-FTA arrangements (LDC rule, s153NA; 25% cap on non-LDC developing-country materials), opens in a new tab)
- Cost records supporting the 50% factory-cost calculation, kept by us and available if the Australian Border Force asks. Australian Border Force (source: Preferential Rules of Origin – guide to claiming preferential rates under non-FTA arrangements (LDC rule, s153NA; 25% cap on non-LDC developing-country materials), opens in a new tab)