Customs (Indian Rules of Origin) Regulations 2022

This instrument relies on a small set of legal and technical concepts that determine whether goods qualify as Australian originating goods for preferential treatment under the India Agreement as implemented in the Customs Act 1901. The Regulations primarily flesh out the meaning and application of three core concepts: tariff change requirement, qualifying value content and valuation of materials, plus the administrative concept of documentary and record keeping obligations.

Tariff change requirement, as addressed here, concerns whether a non‑originating material has undergone a change in tariff classification sufficient to confer originating status on the final goods. The instrument creates a limited exception to a strict tariff change requirement. Where a non‑originating material itself was produced entirely in India, or in India and Australia, from other non‑originating materials, and each of those other non‑originating materials satisfies the tariff change requirement (including by repeated application of the same section), the original non‑originating material is taken to satisfy the change in tariff classification (Reg 5). The provision is recursive and therefore permits layered treatments of upstream materials within India and Australia.

Qualifying value content is the numerical threshold that measures the share of originable value in the goods. The Regulations prescribe two alternative calculation methods. The build‑down method calculates qualifying value content as (customs value minus value of non‑originating materials) divided by customs value, expressed as a percentage (Reg 7(1)-(2)). The build‑up method calculates qualifying value content as value of originating materials divided by customs value, expressed as a percentage (Reg 8(1)-(2)). The instrument sets different thresholds for the two methods: 45 per cent for build‑down and 35 per cent for build‑up (Reg 6). The Regulations therefore allow exporters/producers a choice of method and different numeric targets.

Valuation of materials is central because both qualifying formulas use the customs value as the denominator and call for values of originating and non‑originating materials in the numerators. The instrument tells users how to arrive at material values. For imported materials, the primary basis is the price paid or payable at importation, with a fallback to the GATT Article VII valuation Agreement if that cannot be determined (Reg 9(2)(a)). For materials acquired in India, the importer chooses among: (i) the price paid or payable by the producer; (ii) the value worked out as if the materials had been imported into India by the producer (that is, the imported valuation treatment in Reg 9(2)(a)); or (iii) the earliest ascertainable price paid or payable in India (Reg 9(2)(b)). For materials produced by the producer, the value is "all the costs incurred in the production of the materials, including general expenses" (Reg 9(2)(c)). The Regulations also prescribe inclusion of insurance and freight to the port of importation (Reg 9(3)), optional inclusions for originating materials (Reg 9(4)) and permitted deductions for non‑originating materials (Reg 9(5)).

Accessories, spare parts, tools and instructional or other information materials can be included in the qualifying value content calculation if the statutory criteria in the Act are satisfied; the Regulations make clear that such items are treated as either originating or non‑originating materials, as applicable, for the operation of the build‑up and build‑down formulas (Reg 10). Packaging materials or containers are treated similarly where the Act requires their inclusion (Reg 11).

Finally, the administrative concept is record keeping. The instrument sets out specific records that must be kept by exporters who are not producers and by producers (Regs 12 and 13). Both categories of obligated persons must hold records sufficient to determine whether the goods are Australian originating goods and to supply a copy of the certificate of origin (Regs 12(1)(i) and 13(1)(l)). Records retention is fixed at five years from the date of issue of the certificate of origin (Regs 12(2) and 13(2)). The instrument permits off‑shore storage and electronic storage subject to ready convertibility to English hard copy (Regs 12(3) and 13(3)).

These concepts operate together: the choice of valuation method and of qualifying method interacts with decisions about sourcing, production cost accounting, inclusion of freight and duties, treatment of packaging and accessories and the documentary trail that producers and exporters must maintain to support a certificate of origin. Each choice is regulated by a specific paragraph in the instrument, so compliance and commercial behaviour will be guided by those textual rules.

The Regulations affect a discrete set of actors in the trade chain involved in exporting goods from Australia to India under the trade agreement rules.

• Producers of goods. Producers are directly affected by the valuation and qualifying value content rules. Where materials are produced by the producer, Reg 9(2)(c) requires the producer to value those materials as "all the costs incurred in the production of the materials, including general expenses." Producers also have detailed record keeping obligations set out in Reg 13. Those obligations include records of purchase of materials, evidence of values and classification under the Harmonized System, production records, evidence of payment, and a copy of the certificate of origin (Reg 13(1)(a)-(l)). Records must be kept for five years from certificate issuance (Reg 13(2)). The producer may store records outside Australia, but they must be in a form enabling determination of origin and readily convertible into English hard copy (Reg 13(3)(a)-(b)(iii)).

• Exporters who are not producers. Reg 12 imposes parallel record keeping obligations on exporters who are not the producer. Those exporters must retain records of purchase of the goods, records of the purchase by the person to whom goods are exported, evidence of payment, Harmonized System classification evidence, records and evidence relating to accessories/spare parts and packaging where relevant, and a copy of the certificate of origin (Reg 12(1)(a)-(i)). These records also must be retained for five years and be readily convertible into English and hard copy (Reg 12(2)-(3)).

• Importers in India. Indirectly affected because the Regulations set out the valuation options for materials acquired in India and the origin status that will determine whether preferential treatment applies at importation into India. Reg 9(2)(b) gives the importer of the goods the choice among valuation options for materials acquired in India. The importer’s choice will affect whether the goods meet the qualifying value content thresholds.

• Supply chain counterparties and upstream suppliers. Manufacturers supplying materials to producers or exporters will be affected because the valuation of imported materials (Reg 9(2)(a)) or materials produced entirely in India (Reg 5) impacts whether final goods qualify as originating. The recursive rule in Reg 5 allows materials produced entirely in India from other non‑originating materials to be treated as satisfying the tariff change requirement provided the upstream materials themselves satisfy it. Upstream suppliers in India and Australia therefore influence qualifying calculations.

• Customs and administrative authorities. The Regulations explicitly tie to the Customs Act 1901 and the customs valuation regime in Division 2 of Part VIII, which are the administrative tools customs authorities will use to determine customs value and to assess certificates of origin. The record keeping and documentation rules indicate the sorts of records customs may request when verifying origin claims (Regs 12-13).

• Advisors and compliance professionals. Accountants, customs brokers and legal advisers will be engaged to implement the valuation options, calculate qualifying value content under alternative methods, prepare certificates of origin and maintain the mandated records.

Who pays: commercial parties pay the compliance costs in preparing, storing and supplying records, and the opportunity cost of any changes to sourcing or product design necessary to meet the origin thresholds (see Regs 6-9, 10-11, 12-13). Who decides: producers and importers make substantive valuation and method choices (Reg 9(2)(b) gives the importer a choice; producers choose how to value materials they produce), while customs authorities will decide whether a goods claim for origin is supported by evidence under the Act and these Regulations.

This Part sets out the primary legal obligations and choices that the Regulations place on parties. The duties and rights flow directly from the text.

Duties

• Meet qualifying value content thresholds when claiming Australian origin. Goods must satisfy either the build‑down threshold of not less than 45 per cent or the build‑up threshold of not less than 35 per cent as worked out under Part 3 (Reg 6). This duty is operative for any goods the exporter wishes to treat as Australian originating goods under the India Agreement as implemented in the Customs Act (Reg 6 and cross‑references to subsection 153ZMN(3)(b) of the Act).

• Correct calculation of qualifying value content. Where the build‑down method is chosen, the producer/exporter must calculate qualifying value content using the formula prescribed in Reg 7, that is (customs value minus value of non‑originating materials) divided by customs value, expressed as a percentage (Reg 7(1)-(2)). Where the build‑up method is chosen, the qualifying value content must be calculated as the value of originating materials divided by customs value, expressed as a percentage (Reg 8(1)-(2)).

• Proper valuation of materials. Parties must follow the valuation rules in Reg 9 when determining the value of originating and non‑originating materials. For imported materials: use price paid or payable at importation or, if that cannot be determined, valuation under the Agreement on Implementation of Article VII of the GATT 1994 (Reg 9(2)(a)). For materials acquired in India: the importer chooses one of three options (Reg 9(2)(b)). For materials produced by the producer: include all costs of production including general expenses (Reg 9(2)(c)). Include freight and insurance to the Indian port of importation when working out values for imported materials (Reg 9(3)). Adjust values by adding specified costs for originating materials (Reg 9(4)) or deducting specified costs for non‑originating materials (Reg 9(5)).

• Include accessories and packaging where statutory criteria are met. If paragraphs in the Act are satisfied (the statutory criteria), accessories, spare parts, tools and instructional or other information materials must be taken into account for the qualifying value content and treated as originating or non‑originating materials as appropriate (Reg 10). Packaging material and containers must be taken into account where paragraphs 153ZMP(1)(a) and (b) of the Act are satisfied, and treated as originating or non‑originating materials as applicable (Reg 11).

• Record keeping. Exporters who are not producers must keep the records listed in Reg 12(1)(a)-(i) for at least five years from the date the certificate of origin is issued, and must ensure records are convertible to English hard copy and are stored in a form enabling determination of origin (Reg 12(2)-(3)). Producers must keep the records listed in Reg 13(1)(a)-(l) for at least five years and likewise ensure convertibility and accessibility (Reg 13(2)-(3)).

Rights and discretionary choices

• Choice of qualifying method. The Regulations permit either the build‑down or the build‑up method to be used. An exporter or producer may select the method that best meets the qualifying value content thresholds for the goods in question and that is commercially advantageous (Reg 6).

• Valuation option for materials acquired in India. The importer of the goods chooses among three valuation bases for materials acquired in India: price paid by the producer; value as if imported; or earliest ascertainable domestic price (Reg 9(2)(b)). That is an explicit procedural right to select the valuation approach for such materials.

• Recursive tariff change treatment. Under Reg 5, a non‑originating material that does not satisfy a particular change in tariff classification may nonetheless be taken to satisfy the change if produced entirely in India or in India and Australia from other non‑originating materials, provided each upstream non‑originating material satisfies the tariff change requirement. This provides a limited policy flexibility to treat layered production wholly in India or in India and Australia as satisfying tariff change requirements.

• Flexibility on record storage location. Both exporters and producers may store required records anywhere in the world, not necessarily in Australia, subject to convertibility and accessibility conditions (Regs 12(3)(a) and 13(3)(a)).

Who decides which options to invoke: producers, importers and exporters make major valuation and method choices under the Regulations. Customs authorities will be the verifier of origin claims and the assessor of whether the documentary and substantive tests have been met under the Customs Act and these Regulations.

The Regulations themselves do not introduce specific monetary penalties or new criminal offences. Instead, they operate within the enforcement and penalty framework of the Customs Act 1901, under which the instrument was made (Reg 3). The instrument references particular statutory subsections for which these Regulations supply rules, including subsection 153ZMN(3)(b) and subsection 153ZML(2) of the Act for origin rules and valuation, and subsection 126AMF(1) of the Act for record keeping (see Reg 4 definitions and the text of Parts 3-5). Consequently, enforcement, audit, objection and penalty mechanisms for non‑compliance are governed by the Customs Act and any penalties or administrative remedies contained in that Act.

From the content of the Regulations the following enforcement mechanics and compliance triggers are apparent and should be treated as the operational enforcement environment.

• Verification and documentary review. The Regulations require specific records and a copy of the certificate of origin be kept for five years (Regs 12(1)(i), 12(2), 13(1)(l), 13(2)). That record keeping creates a documentary trail that customs authorities may inspect when verifying origin claims. The requirement that records be held in a form that "would enable a determination of whether the goods are Australian originating goods" (Regs 12(3)(b)(i) and 13(3)(b)(i)) anticipates documentary and evidence review by customs officials.

• Audit and access to records. The Regulations permit records to be held outside Australia but require records to be readily convertible into English hard copy (Regs 12(3)(b)(ii)-(iii) and 13(3)(b)(ii)-(iii)). This is an administrative constraint designed to ensure accessibility for verification, which in practice supports audits, requests for information and verification visits depending on administrative practice under the Customs Act.

• Reliance on the Customs Act enforcement regime. Because the Regulations operate by reference to and to implement provisions of the Customs Act, any failure to meet the substantive origin rules or record keeping obligations will be handled under the Act. Reg 12 and Reg 13 are expressly made "for the purposes of subsection 126AMF(1) of the Act," indicating that breaches of the obligations addressed in those Regulations will fall to be assessed under the Act’s compliance apparatus.

• No express administrative discretion or remedial processes in the Regulations. The instrument does not itself set out an administrative review or appeal process, does not provide for provisional measures, and does not specify time limits for customs queries. These procedural matters are therefore left to the Act and the broader administrative framework. Parties will need to consult the Customs Act for specifics on notices, audits, objections and any penalty regime.

Consequently, the enforcement regime for non‑compliance is indirect: compliance is compelled by origin rules and record obligations in the Regulations, and any enforcement action will be predicated on the powers, penalties and processes in the Customs Act and related administrative practice. Users should therefore consult the relevant sections of the Customs Act referenced in this instrument for the detailed penalty and enforcement rules that will apply in case of non‑compliance.

The Regulations are not standalone; they function as subordinate instruments to the Customs Act 1901 and interact explicitly with international valuation rules. The instrument makes multiple cross‑references to statutory provisions and international agreements.

• The Customs Act 1901. The Regulations are made under the authority of the Customs Act 1901 (Reg 3). Definitions for key terms used in the instrument, such as "Agreement," "Australian originating goods," "certificate of origin," "Harmonized System," "non‑originating materials," "originating materials," "production," "territory of Australia" and "territory of India," are all given by subsection 153ZML(1) of the Act and are therefore hooked into the Act’s definitions (Reg 4). The qualifying value content requirements are prescribed "for the purposes of paragraph 153ZMN(3)(b) of the Act" (Reg 6), and the build‑down and build‑up methods are prescribed "for the purposes of paragraph 153ZMN(6)(b) of the Act" (Regs 7 and 8). The valuation rules in Reg 9 are provided "for the purposes of subsection 153ZML(2) of the Act." The record keeping rules in Parts 5 are stated to be "for the purposes of subsection 126AMF(1) of the Act" (Regs 12-13). Therefore, interpretation and enforcement must be done in the context of the Act; any remedies, penalties or procedural rights arise under the Act.

• International valuation rules. For imported materials, Reg 9(2)(a)(ii) provides a fallback valuation method "in accordance with the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994" if the price paid or payable at importation cannot be determined. The instrument therefore explicitly ties material valuation to the GATT Article VII valuation Agreement as in force for Australia, integrating international customs valuation principles into the domestic origin valuation rules.

• The India Agreement and implementing legislation. The instrument is titled to implement the Indian rules of origin as part of the India‑Australia Economic Cooperation and Trade Agreement. The instrument’s commencement is linked to Schedule 1 to the Customs Amendment (India‑Australia Economic Cooperation and Trade Agreement Implementation) Act 2022 (Reg 2). The term "Agreement" used in the instrument is defined by subsection 153ZML(1) of the Act to reference the relevant trade agreement, so the Regulations must be read alongside the Act's implementation of the India Agreement.

• Harmonized System classification. The Regulations repeatedly require and reference classification under the Harmonized System when keeping records (Regs 12(1)(d), 13(1)(e)). The Harmonized System classification will therefore interact with tariff classification rules under the Customs Act and World Customs Organization rules for classification.

• Other Australian law obligations. While the instrument permits records to be kept anywhere, the storage and transfer of records may intersect with other Australian legal regimes, such as taxation record obligations, privacy or data protection rules when commercial information is stored offshore. Those interactions are not addressed in the Regulations themselves and parties should consider them separately.

• Administrative law and review. Although the instrument does not set out procedural dispute resolution mechanisms, the Act contains provisions governing admin decisions and appeals. Because the Regulations implement statutory origin requirements and record keeping obligations for the purposes of particular subsections of the Act, parties will need to use the Act’s administrative and judicial review channels in any dispute over origin determinations, valuation decisions or alleged breaches.

In short, the Regulations operate as detailed subordinate rules that plug into the broader Customs Act scheme, adopt the international GATT valuation Agreement where necessary, and require interplay with Harmonized System classification practice. Users must therefore interpret and implement these Regulations in the context of the applicable provisions and procedures of the Customs Act and any other relevant domestic or international law that governs valuation, documentary evidence and customs procedures.

The instrument as presented contains its original text and a commencement table. The effective commencement is stated as the later of registration and the commencement of Schedule 1 to the Customs Amendment (India‑Australia Economic Cooperation and Trade Agreement Implementation) Act 2022; the note in the commencement table records that paragraph (b) applies and gives the date 29 December 2022 (Reg 2). The instrument is dated 24 November 2022 and bears the signatures of the Governor‑General and the Minister for Home Affairs (front matter).

The instrument includes a standard note that the commencement table relates only to the provisions of the instrument as originally made and will not be amended in the instrument to reflect later amendments (Reg 2(1) table note). No amendment provisions or amendment history entries are printed in this text. The content as presented therefore represents the original regulation text as made and commencing in late 2022.

Because this is a subordinate legislative instrument, its amendment history will be recorded in the usual way on the federal register of legislation and in federal gazettes. Practitioners should consult the official Commonwealth consolidated legislation database or the Federal Register of Legislation for any subsequent amendments after the original making date. The instrument itself contains neither retrospective amendments of its own content nor transitional provisions beyond the commencement mechanism linked to the implementing Act.

Where an amendment to the primary statute, the Customs Act 1901, alters the relevant subsections that these Regulations operate to give effect to,subsections such as 153ZML, 153ZMN or 126AMF,the Regulations may require corresponding amendment to maintain consistency. The instrument’s definition section explicitly defers to the Customs Act for many terms (Reg 4), which means any statutory change to those definitions would have consequential interpretive effects for these Regulations until or unless the Regulations are amended.

At the time the instrument was made, the instrument refers to international instruments "as in force for Australia from time to time" when citing the Agreement on Implementation of Article VII of the GATT 1994 (Reg 4). That phrasing leaves open that future changes to Australia’s relationship with the Agreement or to the Agreement itself could affect how Reg 9(2)(a)(ii) operates, again requiring practitioners to monitor both the statute and the international law status.

In short, the instrument contains its original text and a single commencement arrangement tied to domestic implementing legislation; no further amendment history is recorded in the instrument itself. Users should check official legislative consolidation sources for amendments after 2022.

The Regulations themselves do not recite any litigation history, and no cases are mentioned in the text. The instrument is a subordinate regulation that prescribes technical rules and administrative obligations; as such, litigation concerning its application would arise under the Customs Act 1901 or in the context of customs determinations made by Australian authorities or disputes at the point of importation into India.

Because the Regulations are made for the purposes of specified subsections of the Customs Act (Reg 4 cross‑references to subsections such as 153ZML(1), 153ZMN(3)(b), 153ZML(2) and 126AMF(1)), any legal challenges or appeals over origin determinations, valuation calculations, treatment of materials, or record‑keeping compliance would ordinarily be resolved through the statutory administrative review route provided by the Customs Act and related administrative law pathways. The instrument itself does not provide or modify court or tribunal jurisdictions.

No judicial decisions are cited or incorporated in the instrument text, and practitioners should not rely on this instrument alone for precedent. If questions of statutory interpretation or administrative law arise from how customs applies these Regulations, parties will need to consult relevant decisions interpreting the corresponding provisions of the Customs Act or decisions dealing with origin and valuation issues under Australian customs law.

For up‑to‑date litigation history, including any cases that have interpreted the operation of these specific Regulations with respect to origin determinations, valuation methodologies or record keeping obligations, users should review court and tribunal databases and the consolidated legislation pages that may list relevant legal challenges post‑commencement. The instrument itself provides no litigation chronology or cited authorities.

This section flags specific traps, procedural pitfalls and areas where choices in the Regulations may create compliance risk. Each item is grounded in the instrument text.

• Different thresholds for alternative methods. The Regulations permit two methods with different numeric thresholds: 45 per cent for build‑down and 35 per cent for build‑up (Reg 6). Using the wrong method or miscalculating customs value or material values can lead to an origin claim falling short of the required threshold. Parties must be explicit about which method they use and document why the chosen method is met.

• Customs value denominator. Both qualifying formulas use "customs value" as defined under Division 2 of Part VIII of the Customs Act (Regs 7 and 8). Misunderstanding how the statutory customs valuation rules operate will distort qualifying value content. Parties should not substitute their internal accounting values for the customs value without verifying alignment with the customs valuation rules.

• Choice of valuation for materials acquired in India is the importer’s. Reg 9(2)(b) gives the importer of the goods the choice among three valuation bases for materials acquired in India. If the importer makes a choice that differs from a producer or exporter’s expectation, this may affect the qualifying calculation and lead to disputes. Producers and exporters should obtain written confirmation from importers about the valuation approach or document the valuation basis used in calculations and the certificate of origin.

• Freight and insurance inclusion and deduction differences. For imported materials, Reg 9(3) mandates inclusion of insurance and freight incurred in delivering the materials to the port of importation in India when working out value. Reg 9(4) permits inclusion of transport‑related costs in working out the value of originating materials to the extent not otherwise accounted for. Reg 9(5) permits deduction of similar costs for non‑originating materials. These asymmetries mean careful cost allocation is required and that errors in including or deducting freight, insurance and packing can swing the qualifying percentage materially.

• Production costs and "general expenses" for producer‑made materials. For materials produced by the producer, Reg 9(2)(c) requires inclusion of "all the costs incurred in the production of the materials, including general expenses." This phrase can be broad and will require accurate internal cost accounting, allocation of overheads and consistent application across products to withstand verification.

• Recursive tariff change treatment limited to materials produced entirely in India or India and Australia. Reg 5 provides a recursive mechanism where a non‑originating material is treated as satisfying a tariff change if it was produced entirely in India, or entirely in India and Australia, from other non‑originating materials that themselves satisfy the tariff change requirement. The recursion is confined to those geographical production circumstances. If production occurs elsewhere, Reg 5 will not rescue a tariff change shortfall.

• Accessory and packaging inclusion depends on statutory criteria in the Act. Regs 10 and 11 apply only if the corresponding paragraphs in the Act are satisfied (paragraphs 153ZMN(7)(a)‑(d) and 153ZMP(1)(a)‑(b)). Parties must verify that the Act’s conditions are met before including accessories or packaging in qualifying value content. Misapplication could produce incorrect origin claims.

• Record retention start date anchored to certificate issue date. Both exporters and producers must retain records for at least five years starting on the date the certificate of origin is issued (Regs 12(2) and 13(2)). Parties that issue retrospective certificates or who lack clear certificate dates risk non‑compliance.

• Records may be stored offshore but must be convertible to English hard copy. Regs 12(3) and 13(3) permit storage at any place but require that non‑English records be in a place and form that enable an English translation to be readily made, and that mechanical/electronic records be readily convertible to hard copy in English. Practical difficulties in translation, conversion or access when authorities seek verification can create compliance friction.

• Who chooses what can be a source of disputes. The Regulations allocate certain choices to specific parties, for example the importer chooses valuation for materials acquired in India (Reg 9(2)(b)). Producers choose how to value materials they produce (Reg 9(2)(c)). Exporters must keep records if they are not the producer (Reg 12). Lack of contractual clarity between counterparties on who will take which choices and who will bear the consequences can create post‑export disputes.

• No express procedural guidance in the Regulations. The instrument does not set out time limits for customs queries, the format for evidence or dispute resolution processes. Those procedural aspects are left to the Customs Act and administrative practice. Parties cannot rely on the Regulations for procedural protections or timelines.

• Potential for calculation inconsistency across jurisdictions. Because the customs value denominator is worked out under Australian customs valuation rules and the importer in India will apply Indian customs at import, there is scope for differences in valuation and interpretation between Australian preparers and Indian customs authorities. The Regulations’ reliance on the customs value as worked out under Division 2 of Part VIII of the Act requires the Australian side to base calculations on Australian customs valuation practice, which must be reconciled with Indian import procedures at the point of entry.

These "gotchas" are concrete outcomes of the provisions in Parts 2-5 (see especially Regs 5-11 and 12-13). Parties should design contractual allocations, internal controls and documentation practices to address each item.

This section provides a practical compliance checklist and process steps grounded in the Regulations. Each step cites the relevant provisions.

1. Determine applicable origin test and choose method

   • Decide whether to apply the build‑down or build‑up method for qualifying value content (Reg 6). Document the choice and rationale. Remember the thresholds are 45 per cent for build‑down and 35 per cent for build‑up (Reg 6(a)-(b)).

2. Establish the customs value

   • Work out the customs value of the goods in accordance with Division 2 of Part VIII of the Customs Act 1901; this value is the denominator in both formulas (Regs 7(1) and 8(1)). Ensure your customs valuation practice aligns with the statutory rules rather than internal transfer pricing alone.

3. Value originating and non‑originating materials

   • For materials imported into India by the producer: use the price paid or payable at importation, and include insurance and freight to the Indian port of importation (Reg 9(2)(a), Reg 9(3)). If that price cannot be determined, use valuation under the GATT Article VII Agreement (Reg 9(2)(a)(ii)).
   • For materials acquired in India: the importer of the goods must choose one of three valuation options , (i) price paid or payable by the producer; (ii) the imported valuation equivalent; or (iii) the earliest ascertainable domestic price (Reg 9(2)(b)). Obtain written confirmation of the selected option from the importer and record that choice.
   • For materials produced by the producer: compile all costs incurred in production, including general expenses; set out cost allocations and overhead apportionments (Reg 9(2)(c)).

4. Account for permitted inclusions and deductions

   • Include insurance, freight, packing and other transport costs in working out values for imported materials (Reg 9(3)). For originating materials, you may include transport‑related costs, duties, taxes and customs brokerage fees that have not been waived, refunded or are recoverable, and costs of waste and spoilage reduced by reusable scrap or by‑products if not already accounted for (Reg 9(4)). For non‑originating materials you may deduct transport costs, duties, taxes and costs of waste and spoilage reduced by reusable scrap or by‑products (Reg 9(5)). Maintain support for all such inclusions and deductions.

5. Treat accessories and packaging appropriately

   • If the statutory criteria in the Act are satisfied, include accessories, spare parts, tools and instructional materials in the qualifying value content and treat them as originating or non‑originating according to their status (Reg 10). If the statutory packaging paragraphs apply, include packaging material or container values similarly (Reg 11). Verify the Act’s relevant paragraphs before including these items.

6. Apply Reg 5 where applicable for tariff change

   • If a non‑originating material fails a tariff change requirement but was produced entirely in India or entirely in India and Australia from other non‑originating materials, check whether each upstream non‑originating material satisfies the change in tariff classification; if so, Reg 5 allows treating the original material as satisfying the change in tariff classification. Document the recursive chain and classification evidence (Reg 5).

7. Prepare and retain required records

   • Producers must hold the records listed in Reg 13(1)(a)-(l); exporters who are not producers must hold the records listed in Reg 12(1)(a)-(i). Key items include purchase records, evidence of payment, Harmonized System classification evidence, production records, value evidence and a copy of the certificate of origin. Keep records for at least five years from the date the certificate of origin is issued (Regs 12(2) and 13(2)). Ensure records are kept in a form that would enable a determination of Australian origin and, if not in English, are in a place and form that enable an English translation to be readily made. If records are electronic, ensure they are readily convertible into a hard copy in English (Regs 12(3) and 13(3)).

8. Coordinate allocation of responsibilities contractually

   • Because the instrument allocates some choices to particular parties (for example the importer’s valuation choice for materials acquired in India, Reg 9(2)(b)), set clear contractual terms among producers, exporters and importers on who will make valuation choices, who will maintain records, who will bear the compliance cost, and how disputes over valuation will be resolved. Keep written evidence of these allocations to assist in an audit or customs query.

9. Maintain harmonised and auditable cost accounting

   • For producer‑made materials where "all the costs incurred" must be included, keep consistent cost allocation methodologies, supporting ledgers, overhead allocation bases and rationale for general expenses included in material values (Reg 9(2)(c)). Prepare audit trails linking cost items to the material valuation calculations used in the qualifying value content computation.

10. Prepare certificates of origin and supporting documentation

    • Ensure the certificate of origin accurately reflects the method used, the valuation bases, the classification under the Harmonized System and the inclusion/exclusion of accessories and packaging as appropriate. Keep a copy of the certificate as required (Regs 12(1)(i) and 13(1)(l)).

11. Be ready for verification and translation needs

    • If records are kept offshore or in another language, ensure a reliable and rapid translation and conversion process to provide English hard copy to Australian customs authorities or to respond to verification requests (Regs 12(3)(b)(ii)-(iii) and 13(3)(b)(ii)-(iii)). Test retrieval and translation processes well before an audit or query.

12. Audit your origin calculations periodically

    • Conduct internal reviews that replicate the build‑up and build‑down calculations, test alternative valuation options for materials acquired in India, and verify that the customs value denominator aligns with the Division 2 Part VIII valuation. Maintain contemporaneous documentation of each calculation and the supporting records.

13. Monitor legal and administrative changes

    • The Regulations rely on the Customs Act and the GATT Article VII valuation Agreement. Monitor amendments to the Customs Act or changes in the GATT Agreement’s application to Australia that could affect valuation or origin interpretation (Reg 4 references and Reg 9(2)(a)(ii)).

Following this checklist aligns with the requirements in Parts 2-5 of the Regulations (see Regs 5-13). Parties should integrate these steps into their trade compliance systems, update commercial agreements to address choice allocations, and prepare supporting documentation given the five‑year retention requirement tied to certificate issuance.