Manufacture of furniture

Manufacturing is a Qualifying Activity under the 'Manufacturing of goods or materials' category. Forensic focus is on the 'Substantial Transformation' test. Auditors will reconcile electricity consumption, machinery depreciation schedules, and labor costs against output to ensure the facility is not merely a distribution hub for finished furniture.

Audit Red Flag

Re-characterization of 'Simple Assembly' or 'Packaging' as 'Manufacturing' to exploit the 0% rate without substantial transformation of raw materials.

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