Indirect material refers to goods that are utilized in the process of producing, testing, or inspecting other goods but are not physically part of those goods. This includes items used in the maintenance of facilities or equipment necessary for production. Examples of indirect materials include fuel, tools, spare parts, and safety equipment.
This term is commonly used in customs and trade law, particularly in relation to the importation and exportation of goods. Understanding what constitutes indirect material is important for compliance with regulations set forth by customs authorities. Users can manage related documentation through legal templates, such as those provided by US Legal Forms, to ensure compliance with relevant laws.
Here are a couple of examples of abatement:
For instance, a manufacturing plant may use lubricants to keep machinery running smoothly. These lubricants are considered indirect materials because they are essential for production but do not become part of the final product.
(Hypothetical example) A company may purchase safety goggles for workers in a factory; these goggles are necessary for safe operations but are not included in the products manufactured.
Indirect material is defined under Title 19 of the Code of Federal Regulations, specifically 19 CFR 10.402. This regulation outlines the classification and treatment of indirect materials in customs duties.
| Term | Definition | Key Differences |
|---|---|---|
| Direct Material | Goods that are physically incorporated into the final product. | Direct materials become part of the finished product, while indirect materials do not. |
| Raw Material | Basic materials from which products are made. | Raw materials can be direct or indirect, depending on whether they are incorporated into the final product. |
If you are involved in the production of goods, ensure that you accurately classify your materials as direct or indirect. Consider using legal form templates from US Legal Forms to assist with compliance and documentation. If you face complexities in your situation, consulting a legal professional is advisable.
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Examples include fuel, tools, safety equipment, and lubricants used in production processes.