Notification No. 81/2020-Cus (N.T.) Date: 21.08.2020
G.S.R. 521 (E).- In exercise of the powers conferred by section 156 read with section 28DA of the Customs Act, 1962 (52 of 1962), the Central Government hereby makes the following rules, namely:-
1. Short title, commencement and
application -
(1)
These rules
may be called the Customs (Administration of Rules of Origin under Trade
Agreements) Rules, 2020.
(2)
They shall
come into force on 21st day of September, 2020.
(3)
They shall
apply to import of goods into India where the importer makes claim of
preferential rate of duty in terms of a trade agreement.
2. Definitions.-
(1) In these rules, unless the context
otherwise requires, -
(a)
" Act" means the Customs Act, 1962
(52 of 1962);
(b) "Preferential
rate of duty" means rate at which customs duty is charged in
accordance with a trade agreement;
(c)
"Preferential tariff treatment"
means allowing preferential rate of duty to goods imported into India in
accordance with a trade agreement;
(d) "Rules
of Origin" means rules notified for a trade agreement in terms of
sub-section (1) of section 5 of the Customs Tariff Act, 1975 (51 of 1975);
(e)
"Tariff notification" means
notification issued under sub-section (1) of section 25 of the Act specifying
preferential rates of customs duty in accordance with a trade agreement;
(f)
"Verification" means verifying
genuineness of a certificate of origin or correctness of the information
contained therein in the manner prescribed by the respective Rules of Origin;
(g)
"Verification Authority" means the
authority in exporting country or country of origin, designated to respond to
verification request under a trade agreement.
(2) The words and expressions used herein and
not defined in these rules but defined in the Act shall have the same meanings
respectively as assigned to them in the Act.
3. Preferential tariff claim.-
(1) To claim preferential rate of duty under
a trade agreement, the importer or his agent shall, at the time of filing bill
of entry,-
(a)
make a
declaration in the bill of entry that the goods qualify as originating goods
for preferential rate of duty under that agreement;
(b) indicate in the bill of entry the respective
tariff notification against each item on which preferential rate of duty is
claimed;
(c)
produce
certificate of origin covering each item on which preferential rate of duty is
claimed; and
(d) enter details of certificate of origin in the
bill of entry, namely:
i. certificate of origin reference number;
ii. date of issuance of certificate of origin;
iii. originating criteria;
iv. indicate if accumulation/cumulation is
applied;
v. indicate if the certificate of origin is
issued by a third country (back-to- back); and
vi. indicate if goods have been transported
directly from country of origin.
(2) Notwithstanding anything contained in
these rules, the claim of preferential rate of duty may be denied by the proper
officer without verification if the certificate of origin-
(a)
is incomplete
and not in accordance with the format as prescribed by the Rules of Origin;
(b) has any alteration not authenticated by the
Issuing Authority;
(c)
is produced
after its validity period has expired; or
(d) is issued for an item which is not eligible
for preferential tariff treatment under the trade agreement;
and in all such cases, the certificate shall
be marked as "INAPPLICABLE".
Explanation:
Clause (d)
of sub-rule (2) includes the cases where goods are not covered in the
respective tariff notification or the product specific rule mentioned in the
certificate of origin is not applicable to the goods.
4. Origin related information to be possessed by importer –
The importer claiming
preferential rate of duty shall-
(a)
possess
information, as indicated in Form I, to demonstrate the manner in which country
of origin criteria, including the regional value content and product specific
criteria, specified in the Rules of Origin, are satisfied, and submit the same
to the proper officer on request.
(b) keep all supporting documents related to Form
I for at least five years from date of filing of bill of entry and submit the
same to the proper officer on request.
(c)
exercise
reasonable care to ensure the accuracy and truthfulness of the aforesaid
information and documents.
5. Requisition of information from the importer -
(1)
Where,
during the course of customs clearance or thereafter, the proper officer has
reason to believe that origin criteria prescribed in the respective Rules of
Origin have not been met, he may seek information and supporting documents, as
may be deemed necessary, from the importer in terms of rule 4 to ascertain
correctness of the claim.
(2)
Where the
importer is asked to furnish information or documents, he shall provide the
same to the proper officer within ten working days from the date of such
information or documents being sought.
(3)
Where, on
the basis of information and documents received, the proper officer is
satisfied that the origin criteria prescribed in the respective Rules of Origin
have been met, he shall accept the claim and inform the importer in writing
within fifteen working days from the date of receipt of said information and
documents.
(4)
Where the
importer fails to provide requisite information and documents by the prescribed
due date or where the information and documents received from the importer are
found to be insufficient to conclude that the origin criteria prescribed in the
respective Rules of Origin have been met, the proper officer shall forward a
verification proposal in terms of rule 6 to the nodal officer nominated for
this purpose.
(5)
Notwithstanding
anything contained in this rule, the Principal Commissioner of Customs or the
Commissioner of Customs may, for the reasons to be recorded in writing,
disallow the claim of preferential rate of duty without further verification,
where:
(a)
the importer
relinquishes the claim; or
(b) the information and documents furnished by
the importer and available on record provide sufficient evidence to prove that
goods do not meet the origin criteria prescribed in the respective Rules of
Origin.
6. Verification request.-
(1) The proper officer may, during the course
of customs clearance or thereafter, request for verification of certificate of
origin from Verification Authority where:
(a)
there is a doubt
regarding genuineness or authenticity of the certificate of origin for reasons
such as mismatch of signatures or seal when compared with specimens of seals
and signatures received from the exporting country in terms of the trade
agreement;
(b) there is reason to believe that the country
of origin criterion stated in the certificate of origin has not been met or the
claim of preferential rate of duty made by importer is invalid; or
(c)
verification
is being undertaken on random basis, as a measure of due diligence to verify
whether the goods meet the origin criteria as claimed:
Provided that a verification request in terms
of clause (b) may be made only where the importer fails to provide the
requisite information sought under rule 5 by the prescribed due date or the
information provided by importer is found to be insufficient. Such a request
shall seek specific information from the Verification Authority as may be
necessary to determine the origin of goods.
(2) Where information received in terms of
sub-rule (1) is incomplete or non-specific, request for additional information
or verification visit may be made to the Verification Authority, in such manner
as provided in the Rules of Origin of the specific trade agreement, under which
the importer has sought preferential tariff treatment.
(3) When a verification request is made in
terms of this rule, the following timeline for furnishing the response shall be
brought to the notice of the Verification Authority while sending the request:
(a)
timeline as
prescribed in the respective trade agreement; or
(b) in absence of such timeline in the agreement,
sixty days from the request having been communicated.
(4) Where verification in terms of clause (a)
or (b) of sub-rule (1) is initiated during the course of customs clearance of
imported goods,
(a)
the
preferential tariff treatment of such goods may be suspended till conclusion of
the verification;
(b) the Verification Authority shall be informed
of reasons for suspension of preferential tariff treatment while making request
of verification; and
(c)
the proper
officer may, on the request of the importer, provisionally assess and clear the
goods, subject to importer furnishing a security amount equal to the difference
between the duty provisionally assessed under section 18 of the Act and the
preferential duty claimed.
(5) All requests for verification under this
rule shall be made through a nodal office as designated by the Board.
(6) Where
the information requested in this rule is received within the prescribed
timeline, the proper officer shall conclude the verification within forty five
days of receipt of the information, or within such extended period as the
Principal Commissioner of Customs or the Commissioner of Customs may allow:
Provided
that where a timeline to finalize verification is prescribed in the respective
Rules of Origin, the proper officer shall finalize the verification within such
timeline.
(7) The proper officer may deny claim of
preferential rate of duty without further verification where:
(a)
the Verification
Authority fails to respond to verification request within prescribed timelines;
(b) the Verification Authority does not provide
the requested information in the manner as provided in this rule read with the
Rules of Origin; or
(c)
the
information and documents furnished by the Verification Authority and available
on record provide sufficient evidence to prove that goods do not meet the
origin criteria prescribed in the respective Rules of Origin.
7. Identical goods.-
(1)
Where it is
determined that goods originating from an exporter or producer do not meet the
origin criteria prescribed in the Rules of Origin, the Principal Commissioner
of Customs or the Commissioner of Customs may, without further verification,
reject other claims of preferential rate of duty, filed prior to or after such
determination, for identical goods imported from the same exporter or producer.
(2)
Where a
claim on identical goods is rejected under sub-rule (1), the Principal
Commissioner of Customs or the Commissioner of Customs shall,
(a)
inform the
importer the reasons of rejection in writing including the detail of the cases
wherein it was established that the identical goods from the same exporter or
producer did not satisfy the origin criteria; and
(b)
restore
preferential tariff treatment on identical goods with prospective effect, after
it is demonstrated on the basis of information and documents received, that the
manufacturing or other origin related conditions have been modified by the
exporter or producer so as to fulfill the origin requirement of the Rules of
Origin under the trade agreement.
8. Miscellaneous. –
(1)
Where an
importer fails to provide requisite information and documents by the due date
prescribed under rule 5, or where it is established that he has failed to
exercise reasonable care to ensure the accuracy and truthfulness of the
information furnished under these rules, the proper officer shall,
notwithstanding any other action required to be taken under these rules and the
Act, verify assessment of all subsequent bills of entry filed with the claim of
preferential rate of duty by the importer, in terms of sub-section (2) of
section 17 of the Act, in order to prevent any possible misuse of a trade
agreement. The system of compulsory verification of assessment shall be discontinued
once the importer demonstrates that he is taking reasonable care, as required
under section 28DA of the Act, through adequate record-based controls.
(2)
Where it is
established that an importer has suppressed the facts, made wilful
mis-statement or colluded with the seller or any other person, with the
intention to avail undue benefit of a trade agreement, his claim of
preferential rate of duty shall be disallowed and he shall be liable to penal
action under the Act or any other law for the time being in force.
(3)
In the event
of a conflict between a provision of these rules and a provision of the Rules
of Origin, the provision of the Rules of Origin shall prevail to the extent of
the conflict.
(4)
The Central
Government may, by notification in the Official Gazette, relax such provisions
of these rules for such class of persons as may be deemed necessary.
Form I
(Please refer to rule 4)
Section I - (Guidance for filing up this
Form)
1. In
terms of section 28DA of the Customs Act, 1962, an importer making a claim for
preferential rate of duty is required to possess sufficient information as
regards the manner in which country of origin criteria, including the regional
value content and product specific criteria, specified in the rules of origin
in the trade agreement, are satisfied.
2. For the above purpose, this Form contains
a list of basic minimum information
which an importer is required to possess while importing the goods.
3. Section 28DA of the Act further requires
that the importer shall exercise reasonable care to accuracy and truthfulness
of the information supplied and the preferential claim. Hence, any additional
information, as deemed fit to ascertain correctness of the country of origin
criterion, may also be obtained.
4. Wherever necessary, technical terms used
in the Form have been explained as below for general guidance. Each trade
agreement, however, has its own set of Rules of Origin, and precise definition
of each of the term listed below may vary. Importers are, therefore, advised to
refer to the respective Rules of Origin also, as notified in terms of
sub-section (1) of section 5 of the Customs Tariff Act, 1975.
i.
Goods Wholly Obtained (WO): Goods produced or obtained without any non-
originating input material incorporated.
ii.
Goods that are produced using
non-originating materials, i.e. not
Wholly Obtained, are required to undergo substantial transformation in a
country for the good to be qualified as originating. This criterion can be met
using following method in combination or standalone, depending upon the
criteria assigned for a good,-
a.
Change in
Tariff Classification (CTC);
b.
Regional or
Domestic Value Content (RVC/DVC); and
c.
Process
rule.
iii.
Content Method: This rule requires that a certain minimum
percentage of the good's value originates in a country for the good to be
considered as originating. The components of value and formula for calculating
such value addition may vary from agreement to agreement.
iv.
Change in Tariff Classification
(CTC) Method: To qualify under this origin
criterion, non-originating materials that are used in the production of the
good must not have the same HS classification (e.g. Chapter level, Heading
level or Sub Heading Level as may be required in the Rules of Origin) as the
final good. Depending on the Trade Agreement requirements, the good would have
to undergo either a change in Chapter (CC), Heading (CTH) or Sub Heading level
(CTSH) in order to qualify for preferential treatment under the FTA. Producers
and/or exporters should know the HS classification of the final good and the
non-originating raw materials.
v.
Process Rule Method: This rule requires the good which is being
considered as originating, to be produced through specific chemical process in
the originating country.
Note: Same good may be assigned different
originating criteria in different trade agreements.
vi.
General Rule vs Product Specific
Rule (PSR): Many trade agreements have a
single rule for all goods that are produced using non-originating materials. In
some agreements, for some or all tariff headings there are Product Specific
Rules (PSRs). Depending on the HS classification of the good, it needs to be
seen which criteria has been used to claim origin.
vii.
De minimis: This provision allows that non-originating
materials that do not satisfy an applicable rule may be disregarded, provided
that the totality of such materials does not exceed specific percentages in
value or weight of the good. This provision may or may not be there in an
agreement and the percentage also varies from agreement to agreement.
viii.
Cumulation/ Accumulation: The concept of
"accumulation"/"cumulation" allows countries which are part
of a preferential trade agreement to share production and jointly comply with
the relevant rules of origin provisions, i.e. a producer of one participating
country of a trade agreement is allowed to use input materials from another
participating country without losing the originating status of that input for
the purpose of the applicable rules of origin. Otherwise said, the concept of
accumulation/cumulation or cumulative rules of origin allows products of one
participating country to be further processed or added to products in another
participating country of that agreement. The nature and extent of such
cumulation is defined in an agreement and may vary from agreement to agreement.
Cumulation can be bilateral, regional, diagonal, etc.
ix.
Indirect/Neutral elements refer to material used in the production,
testing or inspection of goods but not physically incorporated into the goods,
or material used in the maintenance of buildings or the operation of equipment
associated with the production of goods. For example, energy and fuel, plant
and equipment, goods which do not enter into the final composition of the
product, etc. Depending upon the trade agreement, these elements may be treated
as originating or non-originating.
x.
Rule on treatment of packages and
packing materials for retail sale: Such rule
provides the manner in which such material will be treated while calculating
qualifying value content or tariff shift.
xi.
Direct Consignment: Most agreements lay down the condition that
good claiming originating status of a country should be directly transported
from that country to the importing country. Certain relaxation may be provided
in a trade agreement, subject to presentation of certain documents.
Section II
(To be filled after filing of Bill of Entry)
(a) Name of the importer:
(b) Bill of Entry (B/E)No. and
Date:
(c) Customs Station where B/E was
filed:
(d) Goods on which preferential
rate of duty has been claimed:
|
S. No. |
Description |
Classification (8 digit) |
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Section III
(This information should be possessed before
import of goods)
Part A:
1. Briefly describe the
production process undertaken in country of origin with respect to production
of the imported good. Also, state which of the originating criteria prescribed
in the Rules of Origin has been claimed. For example, WO, RVC + CTH/CTSH or CTH
or CC or RVC, etc.
[WO: Wholly Obtained; RVC:
Regional Value Content; CTH: Change in Tariff Head; CTSH: Change in Tariff
Sub-Head; CC: Change in Chapter]
Note 1: Where
the good is claimed to be "Wholly Obtained'', mention the process through
which it is claimed to fall under this category. Each trade agreement lists out
such processes under a specific rule and may vary from agreement to agreement.
Examples:
o goods obtained by hunting or
trapping within the land territory, or fishing or aquaculture conducted within
the internal waters or within the territorial sea of the Party;
o goods produced on board factory
ships from the goods referred to in preceeding paragraph, provided that such
factory ships are registered or recorded with a Party and fly its flag.
Note 2:
If the goods are not wholly obtained, the manufacturing/processing undertaken
in country of origin must be ascertained.
|
Description
of goods |
Production
process |
Originating
Criterion |
|
1. |
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2. |
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Part B:
(To be filled if originating
criteria is NOT wholly obtained, for each of such good under import, on
separate sheets)
1. State the following information for each
originating material or component used in production of good subject to this
request. If no originating material/components were used, same should be
indicated as "None".
Description
of good under import and its classification (8 digit):
|
Description of the originating Materials or
Component |
Whether manufactured by producer of final
good |
Whether procured by producer locally from a
third party |
In case procured from third party, did
producer of final good seek conformation and
documentary proof of origin of these components? |
|
|
(Yes/No) |
(Yes/No) |
(Yes/No) |
|
1. |
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2. |
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Note: If origin of any of the components used
in the manufacture of final good cannot be ascertained, same should be treated as
non-originating.
2.
|
a. |
Is the de minimis provision
used to determine whether the good subject to this request qualifies as an
originating good? |
o Yes |
o No |
|
If yes, describe such material
and the percentage value or quantity as applicable. |
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|
b. |
Is the accumulation/ cumulation
provision applied to determine whether the good subject to this request
qualifies as an originating good? |
o Yes |
o No |
|
If yes, describe the manner and
extent of cumulation. |
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c. |
Has any other additional
criteria such as indirect/neutral materials, packing materials, etc. used in
ascertaining whether the good qualifies as an originating good. |
o Yes |
o No |
|
If yes, provide the criteria
used: Describe the material
concerned: |
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d. |
Is the originating criteria
based on value content? |
o Yes |
o No |
|
If yes, provide the following: (i) percentage of local value
content: (ii) components which
constitute value addition (e.g. material, profit, labour,
overhead cost, etc.): |
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e. |
Has CTC rule been applied for
meeting originating criteria? |
o Yes |
o No |
|
If yes, provide HS of
non-originating material/components used in the production of good: |
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f. |
Has process rule been applied
in ascertaining origin of good subject to this request? |
o Yes |
o No |
|
If yes, provide the rule
applied |
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g. |
Has the CoO been issued
retrospectively? |
o Yes |
o No |
|
If yes, provide reasons for
same |
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h. |
Has the consignment in question
been directly shipped from the country of origin? |
o Yes |
o No |
|
If not, then has it been
ascertained that same is as per provisions of the concerned agreement? How has it been ascertained
that goods have met the prescribed conditions of Direct Shipment? |
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