Certificate Of Origin is mainly needed to check whether the goods being exported/imported are legal and whether such export or import is subject to duties.
1. What is a 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.
2. Who Issues a Certificate of Origin?
A Certificate of Origin is issued by both the Indian Chamber of Commerce as well as Trade Promotion Council of India. This certificate issued by these two bodies is essential for exporters in India to prove that the commodities being exported are of Indian origin. It also proves that the commodity exported is wholly obtained, manufactured or produced in India. Millions of Certificates of Origins are issued around the world to facilitate trade and commerce worldwide. A Certificate of Origin must be signed by the exporter with a permanent indemnity bond on a non-judicial stamp paper of Rs 10, duly notarised (format for Indemnity Bond is available with the Certificate of Origin Dept). The certificate must also be signed and stamped by the Chamber of Commerce or any other authority with such qualification. It is the most commonly used document to prove the origin of goods.
3. Importance of Certificate of Origin
The main requirement for a Certificate of Origin is for clearing customs. If the goods, exported/imported do not come with a Certificate of Origin, the Customs officer tasked with checking the goods will not allow the goods to leave the warehouse. The Certificate of Origin is used by the Customs officer to determine the duties that have to be paid and to check whether the goods being exported/imported are illegal.
4. 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.
These are the following schemes under which India receives tariff preferences:
- 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.
- 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.
- SAARC Preferential Trading Agreement (SAPTA): Tariff concession extends only to countries in SAARC.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
5. How to Get a Certificate of Origin
Depending upon which country one is exporting to and whether preferential tariff rates are available when exporting to certain countries, one has to approach different agencies to procure a Certificate of Origin. The list of qualified agencies is given in the Hand Book Procedures Vol.1. For procuring a non-preferential Certificate of Origin, one must approach any agency that has been listed under Appendix 4C of the Hand Book Procedures Vol.1. For preferential Certificate of Origin, one must approach agencies listed under appendix 4A of the Hand Book Procedures Vol.1. In addition, agencies authorised to issue Preferential Certificate of Origin under Hand Book Vol. 1 are also authorised to issue Non-Preferential Certificate of Origin. They must submit the following documents when applying for a Certificate of Origin: – A cover letter for the issue of Certificate of Origin. – Details of the product that is being exported (amount, origin etc.). – Packing list in duplicate for the concerned invoice. – One copy of the invoice with the following declaration: “We hereby declare that the goods mentioned in this invoice are of Indian Origin and manufacture.” – Nine copies of the Certificate of Origin. – Fee that is applicable per certificate.
6. Procedure for Issuing Certificates of Origin
To know the procedure for issuing a Certificate of Origin, please visit the Federation of Indian Export Organisations (FIEO) website. Disclaimer:The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.