Certificate of Origin

A Certificate of Origin is a certificate that is used to identify the country of manufacturing of any goods or commodity. The Certificate of Origin carries many other points of information such as what the product is, its destination and the countries of export. It is a necessary instrument for export or cross-border trades, as agreed upon by trade agreements and treaties by nations.

Types of Certificate of Origin

There are two kinds of Certificate of Origin that Chambers of Commerce may issue:

Non-preferential Certificate of Origin: This type of Certificate of Origin states that the goods being exported/imported are not given any preferential tariff treatment and the due duties must be levied upon the goods that are being moved.

Preferential Certificate of Origin: This type of Certificate of Origin is given towards goods that are subject to preferential tariff treatment in the payment of duties. These duties may be a reduction of the normal tariff, or it also may be a complete exemption of the tariffs. Such a situation arises when two or more nations reach a trade agreement entailing such exemptions when goods are exported or imported between these nations.

Importance of Certificate of Origin

The Certificate of Origin (COO) is of utmost importance in international trade for several reasons:

Proof of Product Origin: The Certificate of Origin certifies that goods in an export shipment were manufactured, produced, or processed in a specific country.

Essential Product Information: It includes vital product details, such as their nationality, country of origin, and intended destination.

Import Eligibility and Customs Duties: The COO is crucial for determining a product’s eligibility for import and assessing applicable customs duties.

Customs Clearance Requirement: Customs officials require the Certificate of Origin to carry out customs clearance procedures, ensuring that goods meet import regulations.

Facilitates Smooth Goods Movement: By verifying compliance with import regulations, the COO facilitates the smooth movement of goods across international borders.

Determines Product Authenticity: The document is key in assessing the origin and authenticity of products in international trade transactions, influencing tariff rates and enforcing trade agreements.

These are the following schemes under which India receives tariff preferences:

01

Generalised System of Preference (GSP): 

This system is implemented to support developing countries by giving them preference in trade tariffs from industrialised and developed countries. It is a non-contractual instrument that is unilateral and is based on a non-reciprocity extension of tariff concessions.

02

Global System of Trade Preference (GSTP):

 This system extends tariff concessions between developing countries who are parties to an agreement. Export Inspection Council (EIC) has the sole authority to issue Certificate of Origin under GSTP.

03

SAARC Preferential Trading Agreement (SAPTA):

 Tariff concession extends only to countries in SAARC.

04

Asia-Pacific Trade Agreement (APTA): 

Presently, India, China, South Korea, Sri Lanka and Bangladesh exchange tariff concession under APTA. APTA offers liberalisation of tariff and non-tariff barriers in order to expand trade in goods in the Economic and Social Commission for Asia and Pacific (ESCAP) region.

 

05

India-Sri Lanka Free Trade Agreement (ISLFTA):

 This agreement is a free trade agreement between India and Sri Lanka. Under this agreement, EIC has the sole authority to issue Certificate of Origin.

06

Indo-Thailand Free Trade Agreement:

 This agreement between India and Thailand is to implement the Early Harvest Scheme where products under this protocol are given tariff preference. Early Harvest Scheme under India-Thailand Free Trade Agreement offers tariff preferences for imports on items, which satisfy Rules of Origin criteria notified by the Department of Revenue, Ministry of Finance vide notification no. 101/2004-Customs dated 31.08.2004. Export Inspection Council is the sole agency to issue Certificate of Origin under this protocol.

07

India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA):

 This is an agreement between India and Malaysia and the EIC has the sole authority to issue Certificate of Origin.

08

India-Korea Comprehensive Economic Partnership Agreement (CEPA):

 India and South Korea (Republic of Korea) signed the Comprehensive Economic Partnership Agreement (CEPA) to expand the business and commercial opportunities between these two countries. EIC has the sole authority to issue Certificate of Origin under this agreement.

09

India-Japan Comprehensive Economic Partnership Agreement (IJCEPA):

 This agreement is between India and Japan to improve and protect investments made between the two countries. Under this agreement, the EIC has the sole authority to issue Certificate of Origin.

10

ASEAN-India Free Trade Agreement: 

This agreement is between India and Japan to improve and protect investments made between the two countries. Under this agreement, the EIC has the sole authority to issue Certificate of Origin.

Eligibility Criteria for Products under the Certificate of Origin

Under the Certificate of Origin, products are categorised based on specific criteria to determine their eligibility for preferential treatment originating from a contracting nation. The categories include:

Wholly Obtained or Produced Products: This category encompasses items that are entirely obtained or produced within the territory of the contracting country. Examples include:

01

Products Produced Exclusively in the Territory:

 These are products made entirely within the country using raw materials or components sourced locally, without incorporating any materials from outside the contracting nation.

02

Sufficient Working or Production:

 Products that have undergone substantial transformation or processing within the contracting country, meeting the Product Specific Rules (PSRs), also qualify. This transformation often involves changes in the product’s HS code or other criteria specified in the trade agreement to confer origin.

Note:- Exporters must provide a Certificate of Origin for their products to affirm their origin as per the stipulations of the trade agreements between the involved nations, ensuring the products are recognised for preferential treatment under those agreements.

Documents Required for DGFT Certificate of origin.

To get a Certificate of Origin from the DGFT, you’ll need to provide:

 Details about what you’re shipping, including the items, how many, and how much they’re worth.

 A receipt from the shipping company with details like who’s sending and receiving the shipment and where it’s going.

 A detailed bill showing what’s in the shipment, including each item’s price.

 A list showing what’s in each package, how it’s packed, and how much it weighs.

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