Friday, September 11, 2020

India to implement ‘rules of origin’ norms for imports from 21 September

MUMBAI (ICIS)--India ‘rules of origin’ norms, which are expected to come into force on 21 September, will help reduce the dumping of goods and stop imports of low quality products, a government official said on Tuesday.
The Department of Revenue under the Ministry of Finance issued the notification on the new provisions on 21 August.
The new norms are expected to check low quality imports and to prevent the dumping of goods by a third country by routing them through one of India’s free trade agreement (FTA) partner countries.
These rules “will apply to imports of goods into India where the importer makes a claim of preferential rate of duty in terms of a trade agreement,” as per the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020.
Countries that have trade pacts with India get the benefit of lesser or zero trade barriers, as well as a concessional tariff regime. Some countries, which do not have trade pacts with India, try to take advantage of these benefits by routing their products through India’s partner countries.
The ‘rules of origin’ provisions prescribe the minimal processing that should happen in the partner country so that the final manufactured product may be termed as originating from that particular country.
As per the new provision, a country which has an FTA with India cannot dump goods from a third country into the Indian market. It has to provide credible proof that it has made a value add to the product that is being exported to India.
Indian importers will have to produce certificates of origin to claim preferential rates of duty for the imported goods.
Customs officers can now ask for further details and documents to determine the origin of imported goods and whether the imports are eligible to avail the concessional duty.
For import of goods produced in a partner country, officers may demand documents substantiating the manufacturing or production process.
Concerned officers can deny the claim to preferential rates in case the certificate of origin is incomplete or has any alterations that have not been officially authenticated.
Claims can also be denied if the validity of the certificate of origin has expired.
Indian customs authorities have been authorised to directly request data from their foreign counterparts in case their doubts are not cleared at the local level.
Benefits can also be denied if the customs officers feel that the documents produced by an importer do not satisfactorily meet the prescribed origin criteria.
“These rules will help businesses in India and abroad to know the exact procedures that will be used for evaluating the preferential rate of duty under trade agreements and the process for verification of certificate of origin,” the government official said.
Importers will now find it difficult to avail preferential rates if the goods are not imported from India’s partner countries, he added.
India has FTAs with more than 30 countries including Japan, South Korea and Singapore, and is in the process of negotiating trade agreements with the USA, Australia, Switzerland, Norway and Iceland among others.

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