ACIS Administration Act 1999

Part 1—Preliminary

1 Short title [see Note 1]

This Act may be cited as the ACIS Administration Act 1999.

2 Commencement [see Note 1]

This Act commences immediately after the commencement of the Customs Tariff Amendment (ACIS Implementation) Act 1999.

3 Purpose of the Act

The purpose of this Act is to provide transitional assistance to encourage competitive investment and innovation in the Australian automotive industry in order to achieve sustainable growth, both in the Australian market and internationally, in the context of trade liberalisation.

4 Overview of the Act

(1) This Act sets up ACIS for the purpose set out in section 3. Under ACIS, participants receive duty credit which can be applied against customs duty payable, or paid, on certain eligible imports (item 41E of Schedule 4 to the Tariff and subsection 74A(1) of this Act). (1A) There are 2 stages in ACIS: (a) Stage 1—the period commencing on the scheme commencement date and ending 31 December 2005; and (b) Stage 2—the period commencing on 1 January 2006 and ending on 31 December 2010. (2) Each ACIS Stage has a cap on the value of certain duty credit that may be entered in the ACIS ledger in respect of that stage. The stage caps are as follows: (a) ACIS Stage 1—$2,000,000,000; (b) ACIS Stage 2—$2,000,000,000. There are also personal limits on each participant in respect of each ACIS year (see section 54). (2A) In ACIS Stage 2, the stage cap will be divided into separate funding pools—one for MVPs and the other for participants who are not MVPs (see section 55). (3) In ACIS Stage 2, the R&D scheme operates to provide to MVPs, within the funding pool for MVPs, duty credits that are unmodulated type J investment credits (see Part 5A). (3A) Participants can receive duty credits in respect of an ACIS Stage if the cap for that stage has not already been reached. Duty credits issued in respect of a particular ACIS Stage may be applied: (a) to the importation of eligible imports; or (b) against the customs duty a person has already paid if the duty was paid in respect of the importation, on or after 1 January 2001, of eligible imports. (3B) Duty credit issued in respect of a particular ACIS Stage expires if the duty credit has not been applied against customs duty: (a) during the particular stage; or (b) on or before 31 December of the calendar year next following the stage (see section 74A). (4) Under ACIS, certain persons may apply for registration under the scheme (Part 2). (5) Once registered, a participant has an obligation to make quarterly returns in accordance with Part 3. (6) On the basis of such returns, a participant is eligible to earn unmodulated credit (Part 4 and the R&D scheme for unmodulated type J investment credit) depending on: (a) the participant’s production of motor vehicles, engines or engine components (MVPs only); and (b) the participant’s investment in certain plant and equipment and research and development. (7) The scheme provides for a modulation process (Part 5) under which unmodulated credit (except unmodulated uncapped production credit and unmodulated type J investment credit), is converted into modulated credit. The modulation process has regard to the stage caps for ACIS. (8) Duty credit is modulated credit, unmodulated uncapped production credit or unmodulated type J investment credit that has been entered in the ACIS ledger. (9) The ACIS ledger is dealt with in Part 6. (10) Duty credit can be: (a) transferred to another person (Part 7); or (b) applied to the importation of certain eligible imports (the Secretary may restrict the uses to which certain kinds of modulated credit can be put (Part 7)); or (ba) applied against an earlier payment of duty on such eligible imports (Part 7); or (c) offset against an amount of unearned credit liability imposed on a person in respect of unearned duty credit (Part 9). (11) Under the scheme, there are powers of audit (Part 8). (12) Certain unearned duty credit can be recovered as provided for in Part 9. (13) Part 10 sets out document retention obligations (section 108) and obligations to update business plans on a regular basis (section 109). (14) Participants may be deregistered in the circumstances set out in Part 11. (15) Part 12 provides for administrative review of certain decisions. (16) Part 13 provides for delegation of powers and the making of regulations.

5 Offences

(1) Chapter 2 of the Criminal Code applies to all offences against this Act. (2) A maximum penalty that is specified: (a) at the foot of a section of this Act (other than a section that is divided into subsections); or (b) at the foot of a subsection of this Act; indicates that a person who contravenes the section or subsection is guilty of an offence against the section or subsection that is punishable, on conviction, by a penalty up to that maximum.

Note 1: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

Note 2: If the specified penalty is imprisonment only, section 4B of the Crimes Act 1914 allows the court to impose a fine instead of imprisonment or in addition to imprisonment.

6 Definitions

(1) In this Act:

ACIS means the Automotive Competitiveness and Investment Scheme established by section 13.

ACIS ledger means the ledger established by the Secretary under section 62.

ACIS Stage means ACIS Stage 1 or ACIS Stage 2.

ACIS Stage 1 means the period commencing on the scheme commencement date and ending on 31 December 2005.

ACIS Stage 2 means the period commencing on 1 January 2006 and ending on 31 December 2010.

ACIS year means the year commencing on the scheme commencement date and each succeeding year before the year commencing 1 January 2011.

ACP means a person registered as an automotive component producer under section 26.

Note: Not all automotive component producers are eligible for registration as ACPs.

allowable, in relation to plant and equipment or research and development, is defined in section 6A.

AMTP means a person registered as an automotive machine tool or automotive tooling producer under section 26.

Note: Not all automotive machine tool or automotive tooling producers are eligible for registration as AMTPs.

approved form means a form approved under section 8.

approved plant and equipment is defined in section 6A.

approved research and development is defined in section 6A.

ASP means a person registered as an automotive service provider under section 26.

Note: Not all automotive service providers are eligible for registration as ASPs.

automotive component means any component (whether its construction or assembly has been completed or not):

(a) that is for use in any type of vehicle that, if imported, would be classified to Chapter 87 of Schedule 3 to the Tariff; or
(b) that has the essential character of a component to which paragraph (a) applies;

other than a component of a kind that is declared by the regulations not to be an automotive component.

automotive machine tools means machine tools of a kind declared by the regulations to be automotive machine tools for the purposes of this Act.

automotive services means design, development, engineering or production services of a kind declared by the regulations to be automotive services for the purposes of this Act.

automotive tooling means tooling of a kind declared by the regulations to be automotive tooling for the purposes of this Act.

duty credit means any of the following that has been entered in the ACIS ledger:

(a) modulated capped production credit;
(b) unmodulated uncapped production credit;
(c) modulated investment credit;
(d) unmodulated type J investment credit.

However, it does not include such a credit that has expired.

eligible imports means:

(a) goods described in column 2 of item 41E of Schedule 4 to the Tariff; or
(b) goods that would have been goods so described if their importation had been by a person who owned and applied duty credits as mentioned in that column of that item.

eligible investments means:

(a) in relation to an MVP—type A, type B or type C investments by the MVP; or
(b) in relation to an ACP—type D or type E investments by the ACP; or
(c) in relation to an AMTP—type F or type G investments by the AMTP; or
(d) in relation to an ASP—type H or type I investments by the ASP.

engine means an engine that:

(a) is designed to propel a motor vehicle; and
(b) has been fitted by its producer with a crankshaft;

whether that engine is a dressed or undressed engine, whether it is a short or long engine and whether it is a finished or unfinished engine.

engine components means goods that, if imported, would be classified to Schedule 3 to the Tariff as follows:

(a) parts for engines classified to heading 8409;
(b) balance shafts, camshafts, crankshafts, plain shaft bearings, flywheels and pulleys classified to heading 8483;
(c) oil pumps, fuel pumps and water pumps classified to heading 8413;
(d) starter motors, alternators and ignition equipment classified to heading 8511;
(e) engine management systems classified to heading 8537 or 9032;
(f) automatic voltage regulators classified to heading 9032;
(g) ignition wiring sets classified to heading 8544.

expires, in relation to a duty credit, has the meaning given by subsection 74A(3).

final quarter means:

(a) for ACIS Stage 1—the quarter ending on 31 December 2005; and
(b) for ACIS Stage 2—the quarter ending on 31 December 2010.

for the MVP’s own use, in relation to type B investment and type C investment, has the meaning provided for in the regulations, if regulations have been made under subsection (4).

Note: Subsection (4) provides for regulations to be made stating when automotive components (other than engines or engine components), automotive machine tools or automotive tooling produced by an MVP or automotive services provided by an MVP are taken to be produced or provided for the MVP’s own use.

insolvent under administration means a person who:

(a) under the Bankruptcy Act 1966 or the law of an external Territory, is a bankrupt in respect of a bankruptcy from which the person has not been discharged; or
(b) under the law of an external Territory or the law of a foreign country, has the status of an undischarged bankrupt;

and includes: (c) a person any of whose property is subject to control under: (i) section 50 or Division 2 of Part X of the Bankruptcy Act 1966; or (ii) a corresponding provision of the law of an external Territory or the law of a foreign country; or (d) a person who has, at any time during the preceding 3 years, executed a personal insolvency agreement under: (i) Part X of the Bankruptcy Act 1966; or (ii) the corresponding provisions of the law of an external Territory or the law of a foreign country.

investment undertaken by a participant has a meaning affected by:

(a) regulations, if regulations have been made under subsection (5); and
(b) section 6C and any regulations made under section 6C.

maximum claimable value, in relation to allowable plant and equipment or allowable research and development of a kind, is defined in section 6A.

modulated ACP, AMTP or ASP investment credit, in relation to a quarter and an ACP, AMTP or ASP, means the unmodulated investment credit (if any) worked out in relation to that quarter and that ACP, AMTP or ASP, modulated in accordance with section 59.

modulated capped production credit, in relation to a quarter and an MVP, means the unmodulated capped production credit (if any) worked out in relation to that quarter and that MVP, modulated in accordance with section 56.

modulated credit means:

(a) modulated capped production credit; and
(c) modulated investment credit.

modulated investment credit means:

(a) modulated MVP investment credit; and
(b) modulated ACP, AMTP or ASP investment credit.

modulated MVP investment credit, in relation to a quarter and an MVP, means the unmodulated investment credit (if any) worked out in relation to that quarter and that MVP, modulated in accordance with section 57.

monitoring warrant means a warrant issued under section 92.

motor vehicle means any vehicle (other than a used vehicle):

(a) that has a gross vehicle weight of not more than 3.5 tonnes; and
(b) that, if imported, would be classified to:
(i) a subheading of heading 8702 or 8703 (other than 8703.10) of Schedule 3 to the Tariff; or
(ii) subheading 8704.21, 8704.31 or 8704.90 of Schedule 3 to the Tariff.

motor vehicle producer means a person who undertakes the production of motor vehicles or engines.

MVP means a person registered as a motor vehicle producer under section 26.

Note: Not all motor vehicle producers are eligible for registration as MVPs.

MVP production, in relation to a quarter and to an MVP, means the completion in that quarter by the MVP of the production of:

(a) motor vehicles; or
(b) engines; or
(c) engine components.

original equipment means:

(a) an automotive component for use in the production of a motor vehicle or an engine by a motor vehicle producer; or
(b) an automotive component designed to the specifications of a motor vehicle producer and purchased by that producer for post assembly fitment to a motor vehicle.

participant, in relation to ACIS, means a person registered as an MVP, ACP, AMTP or ASP.

Note: Person includes a group (see subsection 6(3)).

passenger motor vehicle means any motor vehicle that, if imported, would be classified to any of the following subheadings of Schedule 3 to the Tariff:

production has the meaning given in section 7.

production value means:

(a) in relation to MVP production achieved by a particular MVP—the value of that production; or
(b) in relation to an automotive component produced by a particular ACP—the value of that automotive component; or
(c) in relation to an automotive machine tool, or automotive tooling, produced by a particular AMTP—the value of that tool or tooling; or
(d) in relation to an automotive service provided by a particular ASP—the value of that service;

worked out in accordance with regulations made for the purpose of this definition.

provided in Australia has the meaning given in subsection 7(7).

quarter means a period of 3 months commencing on 1 January, 1 April, 1 July or 1 October of a year.

R&D scheme means the scheme the Minister formulates under subsection 60A(1).

registration quarter, in relation to a person in respect of whom the Secretary has decided to grant an application for registration as a participant, means the quarter in which the registration took effect, or is taken to have effect, under section 28.

relevant quarter, in relation to a participant who provides a return for a particular quarter as such a participant under section 35, means each of the quarters included within the period comprising:

(a) if that particular quarter is the registration quarter for that participant—the 8 quarters preceding that registration quarter; and
(b) if that particular quarter is the first quarter following the registration quarter for that participant—the 9 quarters preceding that particular quarter; and
(c) if that particular quarter is the second quarter following the registration quarter for that participant—the 10 quarters preceding that particular quarter; and
(d) if that particular quarter is any later quarter following the registration quarter for that participant—the 11 quarters preceding that particular quarter.

sale has a meaning affected by subsection (2).

sales value, in relation to goods sold and services provided by a participant, means the value of the goods sold or services provided less, in the case of goods, any sales tax payable on those goods.

scheme commencement date means 1 January 2001 unless, before that date, an earlier date, which must be the first day of a calendar year, is proclaimed for the purposes of this definition.

Secretary means the Secretary of the Department.

services includes the provision, grant or conferral of any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities under a contract, for which remuneration is payable in the form of a royalty or similar exaction.

specified load‑carrying vehicle means a motor vehicle that, if imported, would be classified to subheading 8704.21, 8704.31 or 8704.90 of Schedule 3 to the Tariff.

Tariff means the Customs Tariff Act 1995.

type A investment, in relation to a quarter and an MVP, means investment undertaken by the MVP in that quarter (whether or not that quarter preceded, or in part preceded, the MVP’s registration) in that part of the MVP’s approved plant and equipment used to produce motor vehicles, engines or engine components.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an MVP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an MVP.

type B investment, in relation to a quarter and an MVP, means investment undertaken by the MVP in that quarter (whether or not that quarter preceded, or in part preceded, the MVP’s registration) in that part of the MVP’s approved plant and equipment used:

(a) to produce automotive components (other than engines or engine components); or
(b) to produce automotive machine tools or automotive tooling; or
(c) to facilitate the provision of automotive services;

other than for the MVP’s own use.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an MVP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an MVP.

type C investment, in relation to a quarter and an MVP, means investment undertaken by the MVP in that quarter (whether or not that quarter preceded, or in part preceded, the MVP’s registration) in that part of the MVP’s approved research and development that is directed:

(a) at the production of automotive components (other than engines or engine components); or
(b) at the production of automotive machine tools or automotive tooling; or
(c) at facilitating the provision of automotive services;

other than for the MVP’s own use.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an MVP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an MVP.

type D investment, in relation to a quarter and an ACP, means investment undertaken by the ACP in that quarter (whether or not that quarter preceded, or in part preceded, the ACP’s registration) in that part of the ACP’s approved plant and equipment that:

(a) is used to produce automotive components, automotive machine tools or automotive tooling; or
(b) is used to facilitate the provision of automotive services.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an ACP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an ACP.

type E investment, in relation to a quarter and to an ACP, means investment undertaken by the ACP in that quarter (whether or not that quarter preceded, or in part preceded, the ACP’s registration) in that part of the ACP’s approved research and development that is directed:

(a) at the production of the automotive components, automotive machine tools or automotive tooling; or
(b) at facilitating the provision of automotive services.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an ACP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an ACP.

type F investment, in relation to a quarter and to an AMTP, means investment undertaken by the AMTP in that quarter (whether or not that quarter preceded, or in part preceded, the AMTP’s registration) in that part of the AMTP’s approved plant and equipment that:

(a) is used to produce automotive machine tools or automotive tooling; or
(b) is used to facilitate the provision of automotive services.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an AMTP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an AMTP.

type G investment, in relation to a quarter and to an AMTP, means investment undertaken by the AMTP in that quarter (whether or not that quarter preceded, or in part preceded, the AMTP’s registration) in that part of the AMTP’s approved research and development that is directed:

(a) at the production of the automotive machine tools or automotive tooling; or
(b) at facilitating the provision of automotive services.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an AMTP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an AMTP.

type H investment, in relation to a quarter and to an ASP, means investment undertaken by the ASP in that quarter (whether or not that quarter preceded, or in part preceded, the ASP’s registration) in that part of the ASP’s approved plant and equipment that is directed at facilitating the provision of automotive services.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an ASP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an ASP.

type I investment, in relation to a quarter and to an ASP, means investment undertaken by the ASP in that quarter (whether or not that quarter preceded, or in part preceded, the ASP’s registration) in that part of the ASP’s approved research and development that is directed at facilitating the provision of automotive services.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an ASP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an ASP.

type J investment, in relation to a quarter falling in ACIS Stage 2 and an MVP, means investment undertaken by the MVP:

(a) in that quarter; and
(b) in that part of the MVP’s research and development that is allowed under the R&D scheme.

Note 1: See regulations made under subsection (5) for when particular investment undertaken by an MVP is treated as having occurred.

Note 2: See section 6C for when investment undertaken by a person can be treated as investment undertaken by another person who is an MVP.

unearned credit liability means a liability imposed under the ACIS (Unearned Credit Liability) Act 1999.

unmodulated capped production credit, in relation to a quarter and to an MVP, means the unmodulated capped production credit (if any) worked out in relation to that quarter and that MVP in accordance with subsection 42(2).

unmodulated investment credit:

(a) in relation to a quarter and to an MVP—means the unmodulated investment credit worked out in relation to that quarter and that MVP in accordance with section 43, 44 or 45; or
(b) in relation to a quarter and an ACP—means the unmodulated investment credit worked out in relation to that quarter and that ACP in accordance with section 46 or 47; or
(c) in relation to a quarter and an AMTP—means the unmodulated investment credit worked out in relation to that quarter and that AMTP in accordance with section 48 or 49; or
(d) in relation to a quarter and an ASP—means the unmodulated investment credit worked out in relation to that quarter and that ASP in accordance with section 50 or 51.

unmodulated type J investment credit, in relation to a quarter falling in ACIS Stage 2, means the credit worked out in relation to that quarter and an MVP under the R&D scheme.

unmodulated uncapped production credit, in relation to a quarter and to an MVP, means the unmodulated uncapped production credit (if any) worked out in relation to that quarter and that MVP in accordance with subsection 42(1).

warrant premises, in relation to a monitoring warrant, means the premises to which the warrant relates.

(2) For the purposes of this Act, the regulations may specify: (a) circumstances in which a sale of goods or services is taken to have occurred; and (b) circumstances in which a sale of goods or services is taken not to have occurred. (3) For the purposes of this Act, a reference to a person registered as an MVP, ACP, AMTP or ASP includes a reference to a group that is so registered in accordance with Division 4 of Part 2. Regulations may provide for the meaning of for the MVP’s own use in the definitions of type B investment and type C investment (4) For the purposes of the definition of type B investment and the definition of type C investment, the regulations may state the circumstances in which: (a) automotive components (other than engines or engine components), automotive machine tools or automotive tooling produced by an MVP are to be taken to be produced for the MVP’s own use; and (b) automotive services provided by an MVP are to be taken to be provided for the MVP’s own use. Regulations may state when investment undertaken by a participant is taken to have occurred (5) The regulations may state: (a) at what point in time, and in what circumstances, particular investment undertaken by a participant is taken to have occurred for the purposes of this Act; and (b) at what point of time investment determined under section 6C to be investment undertaken by a participant is taken to have occurred.

Note: See the definitions of each type of eligible investment.

6A Approved plant and equipment and approved research and development

Outline of what approved plant and equipment and approved research and development is (1) There are 2 aspects to approved plant and equipment or approved research and development: (a) firstly, the plant and equipment or research and development must be allowable plant and equipment or allowable research and development; and (b) secondly, the allowable plant and equipment or allowable research and development is only allowed to a given value—the maximum claimable value in respect of that plant and equipment or research and development. Meaning of defined terms relating to approved plant and equipment or approved research and development (2) In this Act:

allowable, in relation to plant and equipment or research and development, means plant and equipment or research and development of a kind declared by the regulations to be allowable.

approved plant and equipment means allowable plant and equipment of the maximum claimable value allowed.

approved research and development means allowable research and development of the maximum claimable value allowed.

maximum claimable value, in relation to allowable plant and equipment or allowable research and development of a kind, means a value in respect of the allowable plant and equipment or the allowable research and development either:

(a) worked out using a particular method set out in the regulations in respect of that kind of allowable plant and equipment or allowable research and development; or
(b) stated in the regulations in respect of that kind of allowable plant and equipment or allowable research and development.

Regulations may provide for certain matters relating to plant and equipment (3) The regulations may provide for: (a) the kinds of plant and equipment that are allowable plant and equipment under this Act; and (b) in respect of each kind of allowable plant and equipment, either: (i) the method of calculating the maximum claimable value of that kind of allowable plant and equipment for the purposes of this Act; or (ii) the amount that is to be the maximum claimable value in relation to that kind of allowable plant and equipment for the purposes of this Act. Regulations may provide for certain matters relating to research and development (4) The regulations may provide for: (a) the kinds of research and development that are allowable research and development under this Act; and (b) in respect of each kind of allowable research and development, either: (i) the method of calculating the maximum claimable value of that kind of allowable research and development for the purposes of this Act; or (ii) the amount that is to be the maximum claimable value in relation to that kind of allowable research and development for the purposes of this Act.

6B Plant and equipment sold by participant

If approved plant and equipment is sold by, or on behalf of, a participant, the investment in that plant and equipment is to be treated, for the purposes of the operation of sections 43, 44, 46, 48 and 50, with effect from the start of the quarter in which that sale took place, as if the investment had never occurred.

6C When investment undertaken by a person may be treated as investment undertaken by another person who is a participant

Outline of section (1) This section allows the Secretary, in limited circumstances, to treat investment undertaken by a person who may or may not be a participant (the original investor) as eligible investment undertaken by another person who is a participant (the participant). For investment to be treated in this way: (a) the participant must apply, in an approved form, to the Secretary; and (b) the Secretary must make a determination under subsection (3) that the circumstances of the relationship between the original investor and the participant fall within the kinds of circumstances set out in guidelines made under subsection (2); and (c) the Secretary must make a determination of a kind referred to in subsection (4) or (5) in respect of the investment. Guidelines dealing with the circumstances of the relationship between the original investor and the participant (2) The Minister may make guidelines setting out the circumstances in which the relationship between 2 persons are circumstances in which the Secretary may make a determination under subsection (3). Secretary to first determine if original investor and participant’s circumstances fall within guidelines (3) The Secretary must examine the circumstances of the relationship between the original investor and the participant. If, after examining the circumstances, the Secretary is satisfied that the circumstances fall within the circumstances set out in the guidelines made under subsection (2), the Secretary may make a determination to that effect. Only after making that determination may the Secretary make a determination under subsection (4) or (5), as appropriate. Eligible investment undertaken by original investor when original investor was a participant (4) If: (a) the original investor was a participant at the time that the investment was undertaken; and (b) the investment was eligible investment of a particular type; and (c) the Secretary is satisfied that it is reasonable in all of the circumstances to allow the investment to be treated as eligible investment of that type undertaken by the participant; the Secretary may determine in writing that the eligible investment is taken to be eligible investment of that type undertaken by the participant. The determination has effect accordingly. Original investor not a participant when investment made (5) If: (a) the original investor was not a participant at the time the investment was undertaken; and (b) the Secretary is satisfied that: (i) if the investment had been undertaken by a participant, the investment would be eligible investment of a type specified by the Secretary; and (ii) it is reasonable in all of the circumstances to allow the investment by the original investor to be treated as eligible investment undertaken by the participant; the Secretary may determine in writing that the investment is: (c) eligible investment of a type specified by the Secretary; and (d) taken to be investment of that type undertaken by the participant. The determination has effect accordingly. Minister may determine guidelines (6) The Minister may determine guidelines that are to be taken into account by the Secretary in making a decision under subsection (4) or (5). Guidelines disallowable instruments (7) Guidelines made under subsections (2) and (6) are disallowable instruments within the meaning of section 46A of the Acts Interpretation Act 1901.

7 Meaning of production of goods and provision of services in Australia

Assembly of components can be production (1) For the purposes of this Act, a person is taken to produce a thing even if the process of production consists entirely of assembling the thing from component parts and the person does not produce any of those component parts. No production unless sale has occurred (2) For the purposes of this Act, a person is taken to produce a thing only at the time when the person sells the thing produced. Production of engines (3) Subject to subsections (1) and (2), an engine is taken to have been produced in Australia if: (a) the fitting of the crankshaft into the engine is carried out in Australia; and (b) the engine has passed final quality control at the end of a production line in Australia. Production of motor vehicles (4) Subject to subsections (1) and (2), a motor vehicle is taken to have been produced in Australia if the motor vehicle: (a) has undergone a process of colour coated painting in Australia; and (b) has passed final quality control at the end of a production line in Australia. Production of engine components (5) Subject to subsections (1) and (2), an engine component is taken to have been produced in Australia if: (a) at least one substantial process in the manufacture of the component is carried out in Australia; and (b) the component has passed final quality control at the end of a production line in Australia. Production of automotive components, automotive machine tools or automotive tooling (6) Subject to subsections (1) and (2), an automotive component, an automotive machine tool or automotive tooling is taken to have been produced in Australia if: (a) at least one substantial process in the manufacture of the automotive component, automotive machine tool or automotive tooling is carried out in Australia; and (b) the automotive component, automotive machine tool or automotive tooling, as the case requires, has passed final quality control at the end of a production line in Australia. Provision of automotive services (7) An automotive service is taken to have been provided in Australia if: (a) the design, development, engineering or production work comprising that service is carried out predominantly in Australia; and (b) payment has been received for carrying out the service.

8 Approved forms

The Secretary may approve a form by instrument in writing.

9 Arm’s length transactions

(1) For the purposes of this Act, whenever it is necessary to determine: (a) the production value or sales value of any motor vehicles, engines or engine components sold by a participant to another person; or (b) the production value or sales value of any other goods or services sold by a participant to another person; that production value or sales value is to be determined on the basis that the participant and other person are at arm’s length. (2) For the purposes of this Act: (a) whenever it is necessary to determine the value of any investment in plant and equipment, or in research and development, undertaken by a participant; and (b) that investment involves the participant entering into a transaction with another person; the value of that investment is to be determined on the basis that the participant and the other person are at arm’s length. (3) For the purposes of this Act, the Minister may make guidelines: (a) for the purposes of determining the circumstances when the parties to a transaction referred to in subsection (1) or (2) are to be treated as not being at arm’s length; and (b) if the parties to a sale of motor vehicles, engines or engine components referred to in paragraph (1)(a) are to be treated, in accordance with the guidelines, as not being at arm’s length—for the purpose of determining what would have been the production value or sales value of the motor vehicles, engines or engine components to which the transaction relates had the parties been at arm’s length; and (c) if the parties to a sale of other goods or services referred to in paragraph (1)(b) are to be treated, in accordance with the guidelines, as not being at arm’s length—for the purpose of determining what would have been the production value or sales value of the goods or services to which the transaction relates had the parties been at arm’s length; and (d) if the parties to a transaction relating to an investment in plant and equipment referred to in paragraph (2)(a) are to be treated, in accordance with the guidelines, as not being at arm’s length—for the purpose of determining what would have been the amount of investment in plant and equipment to which the transaction relates had the parties been at arm’s length; and (e) if the parties to a transaction relating to an investment in research and development referred to in paragraph (2)(b) are to be treated, in accordance with the guidelines, as not being at arm’s length—for the purpose of determining what would have been the amount of investment in research and development to which the transaction relates had the parties been at arm’s length. (4) Guidelines made for the purposes of subsection (3) are disallowable instruments within the meaning of section 46A of the Acts Interpretation Act 1901.

10 Determination of entitlement to credit between participants

(1) If more than one participant is involved in a transaction giving rise to the issue of modulated credit, unmodulated uncapped production credit or unmodulated type J investment credit, the credit will be issued to only one of those participants. (2) The Minister must make rules for identifying, in circumstances where more than one participant is involved in a transaction giving rise to the issue of modulated credit, unmodulated uncapped production credit or unmodulated type J investment credit, the participant who is entitled to that credit. (3) A rule made under subsection (2) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.

11 Other Commonwealth assistance

(1) For the purposes of this Act, a participant has received other Commonwealth assistance if the participant: (a) being an MVP, has received and is entitled to financial assistance other than duty credit in relation to the production of motor vehicles, engines or engine components of a kind giving rise to an entitlement to duty credit under this Act; or (b) being a participant of any kind, has received and is entitled to financial assistance other than duty credit for investment in plant and equipment of a kind giving rise to an entitlement to duty credit under this Act; or (c) being a participant of any kind, has received and is entitled to financial assistance other than duty credit for investment in research and development of a kind giving rise to an entitlement to duty credit under this Act. (2) For the purposes of paragraph (1)(a), an MVP is taken to have received and to have been entitled to financial assistance other than duty credit in relation to the production of motor vehicles, engines or engine components of a kind giving rise to an entitlement to duty credit under this Act if that MVP, whether before or after becoming such an MVP, received and was entitled to financial assistance other than duty credit in relation to goods whose later sale completed their production as such motor vehicles, engines or engine components. (3) The Minister may determine, in writing, that a specified form of assistance provided by the Commonwealth: (a) is not financial assistance for the purposes of this section; or (b) is financial assistance for the purposes of this section. (4) If the determination specifies that a form of assistance is financial assistance, the determination may also specify the method by which the amount of assistance received is to be worked out. (5) A determination under this section is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.