Rules of origin and Originating criteria
Under a foreign trade agreement, duty concessions are required to be extended only to such imported goods which are ‘made in’ the exporting country. Each FTA contains a set of rules of origin, which prescribe the criteria that must be fulfilled for goods to attain ‘originating status’ in the exporting country. Such criteria are generally based on factors such as domestic value addition and substantial transformation in the course of manufacturing/processing. For instance, the originating criteria finalized under a trade agreement could be domestic value addition of minimum 35% plus substantial transformation through Change in Tariff Sub-Heading (CTSH).
The goods imported under a trade agreement are required to be covered under a ‘Certificate Of Origin’ (COO) issued by the designated authority of the exporting country. The COO contains details of goods covered and originating criterion fulfilled.
CTH: Change in Tariff Heading (4-digit level);
CTSH: Change in Tariff Sub Heading (6-digit level);
NOM: Non-Originating Material;
PSR: Product Specific Rules
Information to be filled in the import declaration
Rule 3 of CAROTAR, 2020 mandates certain origin related details to be entered in the Bill of Entry, as available in the Certificate of Origin: (i) (ii) (iii) (iv)
certificate of origin reference number;
date of issuance of certificate of origin
originating criteria;
indicate if accumulation/cumulation is applied;
indicate if the certificate of origin is issued by a third country (back-to-back); and
indicate if goods have been transported directly from country of origin
