EXPORT INSPECTION COUNCIL OF INDIA CONTENTS

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1 EXPORT INSPECTION COUNCIL OF INDIA CONTENTS Sl. No. Particulars Page No. 1. Introduction Generalised System of Preferences (GSP) Global System of Trade Preferences among developing countries (GSTP) Asia Pacific Trade Agreement (APTA) SAARC Preferential Trading Arrangement (SAPTA) Indo-Sri Lanka Free Trade Agreement (ISFTA) India Afghanistan Preferential Trade Agreement (IAPTA) South Asian Free Trade Area (SAFTA) CECA between India & Singapore Early Harvest Scheme Under Indo-Thailand Framework Agreement (ESH-ITFA) India MERCOSUR Preferential Trade Agreement(IMPTA) India Korea CEPA ASEAN India Free Trade Agreement India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA) India-Japan Comprehensive Economic Partnership Agreement (IJCEPA) On Pre Exportation Verification Guidelines for Issue of Certificate of Origin under Tatkal Scheme Procedure for obtaining Certificates of Origin from EIAs EIC Network Amendment no.2 to Document no.eic/coo-ps/ex.inst/jan /2007/Issue EIC/COO-Gen.Doc/Rev 2/ (1)

2 DISCLAIMER This booklet is meant for free distribution and has no legal value. While every care has been taken to ensure that the information contained in this booklet is correct, no liability or claim may be made against EIC. For full and detailed information, official text of relevant documents / Regulations / Agreements may be referred to. EIC/COO-Gen.Doc/Rev 2/ (2)

3 INTRODUCTION Export Inspection Council of India (EIC) was established under the Export (Quality Control and Inspection) Act 1963, to advise the Central Government on measures to be taken for development of export trade through quality control and pre-shipment inspection. EIC operates through five field organisations known as the Export Inspection Agencies (EIAs) with headquarters at Mumbai, Kolkata, Kochi, Delhi and Chennai. Over more than 38 years of its existence, EIC / EIAs have been instrumental in building quality awareness amongst a wide cross section of exporting industry. EIC / EIAs render services to the export sector in the following areas: * Certification of Product Quality in accordance with the norms and legislations of different destinations worldwide through Consignment-wise Inspection (CWI) or system approach including In-process Quality Control (IPQC) or Self Certification (SC). * Approval and certification of processing and manufacturing units based on Food Safety Management Systems like HACCP, Good Hygiene/Manufacturing Practices (GHPs / GMPs). * Product Testing microbiological, chemical, biochemical, physical contamination, heavy metals, pesticide residues, biotoxins, additives and all other relevant parameters. * Training and technical assistance to industry in installation of food safety/quality/environment/laboratory management system meeting HACCP/ISO 9000/ISO 14000/ISO standards and norms; product testing and certification under preferential tariff schemes. * Issue of Certificates of - Origin under preferential tariff schemes like Generalised System of Preferences (GSP), Global System of Trade Preferences (GSTP), SAARC Preferential Trading Agreement (SAPTA), Indo-Sri Lanka Free Trade Agreement (ISFTA), Asia Pacific Trade Agreement (APTA), South Asia Free Trade Area (SAFTA), CECA India -Singapore, EHS Indo-Thailand and Indo-Afghanistan Preferential Trade Agreement (IAPTA) - Health for food items. - Inspection for all commodities. - Authenticity for Basmati Rice. Under the provisions of WTO Agreements, especially the SPS Agreement, several of India's trading partners have imposed import control systems based on international standards, particularly in food sector. The WTO Agreements also provide for recognition of the export certification system of member trading partners provided it meets the requirements of their import control. EIC, as the official export certification body of India, has initiated dialogue with several of India's trading partners seeking recognition of its certification. EIC/COO-Gen.Doc/Rev 2/ (3)

4 Presently, EIC's certification is recognised in the following areas: 1. Basmati Rice by European Commission (for Certificates of Authenticity). 2. Black Pepper by United States Food & Drug Administration (USFDA) (as per which, any consignment of black pepper from India, not accompanied by EIA's certificate, is detained on arrival in USA). 3. Fish & Fishery Products by European Commission (as per which, the processing units are specifically approved for export to European Union and the names of approved units sent to the European Commission for formal notification, after which they can export to EU countries). 4. Fish and Fishery Products by Australian Quarantine & Inspection Service (AQIS) Australia's official import control agency (as per which seafood consignments from India accompanied by EIC's certificates will undergo only random verification sampling not exceeding 5% of the consignments and health certificates issued by EIC will be accepted). Right from the inception of GSP in 1971, EIC has been functioning as the Nodal Authority for issue of GSP certificates of origin. In fact, it is the sole agency for printing and distribution of blank certificate of origin forms and one of the two organisations authorised by the Government of India to issue GSP certificates of origin for all products. It also organises training programs on GSP and other Preferential Schemes for the benefit of certifying officials as well as the exporters and offers consultancy to exporters for qualification of products under all schemes of preferential origin. Information in respect of services offered by the Export Inspection Council of India and its field organisations, the Export Inspection Agencies is also available on the website In case of any query, kindly contact, EXPORT INSPECTION COUNCIL OF INDIA, (Ministry of Commerce & Industry) 3 rd Floor, NDYMCA Cultural Centre Building, 1, Jai Singh Road, New Delhi Tel: / / ; Fax: eic@eicindia.org Website: www//eicindia.org EIC/COO-Gen.Doc/Rev 2/ (4)

5 GENERALISED SYSTEM OF PREFERENCES (GSP) 2.1 Introduction The Generalised System of Preferences (GSP) is a non-contractual instrument by which industrially developed countries extend tariff concession to goods originating in developing countries. The declared objectives are to assist developing countries: - in increasing their export earnings : - in promoting their industrialisation : and - in accelerating their rates of economic growth. The principles underlying GSP were formally accepted in March 1968 during the 2 nd UNCTAD Conference held at New Delhi. 2.2 What is GSP Traditionally, the GSP has been an autonomous commercial policy instrument, directed towards development. It has been based on the most classical commercial policy instrument of all: the tariff. The objective has been to offer the developing countries a more preferential tariff compared to that given to developed countries in order to enable a more favourable access to the developed market for their exports. For a layman GSP is a preferential tariff system extended by developed countries (preferences giving countries) to developing countries (preference receiving countries). It involves reduced MFN tariff or duty free treatment of eligible products exported by developing countries like India, to the markets of developed countries, like Member States of European Union. The preferences offered are, however, unilateral and non discriminatory. 2.3 Benefits of GSP Indian exporters benefit indirectly through the benefits that accrues to the importer by way of reduced tariff or duty free entry of eligible Indian products. Reduction or removal of import duty on an Indian product makes it more competitive in the developed foreign markets. EIC/COO-Gen.Doc/Rev 2/ (5)

6 2.4 Generalised Schemes of Preferences The generalized schemes of preferences were first put into operation in the year 1971, with the application of the basic principles defined in the generalized system of preferences elaborated within the UNCTAD. While European Economic Community (now the European Union) was first to grant tariff preferences under GSP, Turkey is the latest entrant to have introduced tariff preferences for goods originating in developing countries wef 1 st January Now, 36 developed countries are offering preferential tariff treatment to the eligible Indian goods through 12 schemes. Each scheme prescribes its own rules and regulations for determining eligibility of a product to preferential tariff treatment. Certificate of origin form A, duly filled in by the exporter and certified by an authorised Governmental Agency is accepted by all countries as evidence of origin for according tariff concessions. Ministry of Commerce and Industry is the administrative Ministry for such authorisation Countries that extend Preferential Tariff Treatment under GSP GSP presently comprises of 12 different schemes extended by 36 preference-giving countries. Australia *EU Canada Austria Czech Republic Japan Belgium Estonia New Zealand Denmark Cyprus Norway Finland Latvia Switzerland France Lithuania United States of America Germany Hungary Republic of Belarus Greece Malta Republic of Bulgaria Ireland Poland Russian Federation Italy Slovenia Turkey Luxembourg Slovakia European Union (EU*) Netherlands Spain Portugal United Kingdom Sweden EIC/COO-Gen.Doc/Rev 2/ (6)

7 2.6 Agencies Authorised to issue Certificates of Origin Presently following organizations have been authorized to issue certificates of origin under GSP. Sl. Organization Commodity (i) (ii) (iii) (iv) (v) (vi) (vii) Export Inspection Council of India through its field organisations the Export Inspection Agencies with offices all over India. Directorate General of Foreign Trade through Regional Offices known as Joint Director General / Deputy Director General of Foreign Trade. Development Commissioner, Export Processing Zone at Santa Cruz (Bombay), Cochin, Madras, Falta, Visakhapatnam, Kandla and Noida. Development Commissioner for Handicrafts through 14 Regional Offices all over India. Marine Products Export Development Authority through their 12 Regional Offices all over India Textiles Committee through 28 Regional Offices all over India Central Silk Board through 8 Regional Offices all over India All Products All Products All Products manufactured by EOUs / units within respective EPZs Handicrafts Marine Products Textiles and Made ups Silk Products (viii) Coir Board, Kochi Coir & Coir Products (ix) Tobacco Board, Guntur Tobacco & Tobacco products (x) Spices Board, Kochi Spices and Cashew nuts 2.7 Fee Structure Sale price of blank form : Rs. 25/- per set / form. Certification Fee : Rs 350 /- per set /form (Without Physical verification) Fee for physical verification : Travel and stay of officer to be borne by the exporter. EIC/COO-Gen.Doc/Rev 2/ (7)

8 GLOBAL SYSTEM OF TRADE PREFERENCES AMONG DEVELOPING COUNTRIES (GSTP) 3.1 Introduction The Agreement on Global System of Trade Preferences among developing countries (GSTP) was negotiated in the year 1988 by 48 developing countries that were member of Group of The declared objectives of the GSTP are: a. To promote and sustain mutual trade, and b. To develop economic co-operation among developing countries (members of Group of 77). 3.2 Rules of Origin The objective of these rules is to determine the origin of products eligible for preferential concessions under GSTP. Products, which have achieved the status originating in India, are eligible for preferential tariff treatment upon imports into participant countries Following products are considered as originating in India, if they are consigned directly to a participant country. a. Products that are wholly obtained in India, as defined at below. b. Products obtained in India in the manufacture of which, in addition to the materials referred to at 4 below and materials originating in participant countries, materials imported from non participant countries and / or materials of undetermined origin are also used, provided the value of materials imported from non participant countries and / or materials of undetermined origin does not exceed 50% of the f.o.b. value of the product, subject to condition detailed at 5 below For the purpose of (b), value of non-originating materials means the c.i.f. value at the time of importation of such materials or, if this is not known and cannot be ascertained and proved, the first ascertainable price paid for the materials in India Within the meaning of (a) above, the following are considered as wholly obtained in India. (a) (b) (c) (d) (e) (f) raw or mineral products 1 extracted from its soil, its water or its seabed; agricultural products 2 harvested there; animals born and raised there; products obtained from animals referred to in clause (c) above; products obtained by hunting or fishing conducted there; products of sea fishing and other marine products taken from the high seas by its vessels 3,4 ; EIC/COO-Gen.Doc/Rev 2/ (8)

9 (g) (h) (i) (j) products processed and/or made on board its factory ships 4,5 exclusively from products referred to in clause (f) above; used articles collected there, fit only for the recovery of raw materials; waste and scrap resulting from manufacturing operations conducted there; goods produced there exclusively from the products referred to in clauses (a) to (i) above Products which comply with origin requirements provided for at above and which are used by a participant as input for a finished product eligible for preferential treatment by another participant shall be considered as a product originating in the territory of the participant where working or processing of the finished product has taken place provided that the aggregate content originating in the territory of the participant is not less than 60 per cent of its f.o.b. value The following are considered to be directly consigned from India to the importing country. a. If the products are transported without passing through the territory of any non participant country. b. The products whose transport involves transit through one or more non participant countries with or without transhipment or temporary storage in such countries; provided that (i) (ii) (iii) the transit entry is justified for geographical reason or by considerations related exclusively to transport requirements; the products have not entered into trade or consumption there; and The products have not undergone any operation there other than unloading and reloading or any operation required to keep them in good condition When determining the origin of the products, packing forms a whole with the product it contains. EIC/COO-Gen.Doc/Rev 2/ (9)

10 3.3 Participant Countries under GSTP Member countries of Group of 77 who negotiated GSTP are as under : Algeria Angola Argentina Bangladesh Benin Bolivia Brazil Cameroon Chile Colombia Cuba Democratic People s Republic of Korea Ecuador Egypt Ghana Guinea Guyana Haiti India Indonesia Iran (Islamic Republic of) Iraq Libyan Arab Jamahiriya Malaysia Mexico Morocco Mozambique Nicaragua Nigeria Pakistan Peru Philippines Qatar Republic of Korea Romania Singapore Sri Lanka Sudan Thailand Trinidad and Tobago Tunisia United Republic of Tanzania Uruguay Venezuela Viet Nam Yugoslavia Zaire Zimbabwe EIC/COO-Gen.Doc/Rev 2/ (10)

11 3.4 Agencies Authorised to issue Certificates of Origin Presently following organisations have been authorised to issue certificate of origin under GSTP. S1. Organization Commodity (i) Export Inspection Council through their field offices known as Export Inspection Agencies with offices all over India. All Products (ii) Tobacco Board, Guntur Tobacco & Tobacco products 3.5 Fee Structure Sale price of blank form : Rs. 25/- per set/form Certification Fee : Rs 350 /- per set /form (Without Physical verification) Notes: ********** 1. Includes mineral fuels, lubricants and related materials as well as mineral or metal ores 2. Includes forestry products 3. Vessels shall refer to fishing vessels engaged in commercial fishing, registered in India and operated by Indian citizen(s) or Government or partnership, corporation or association, duly registered in India, at least 60 per cent of equity of which is owned by a citizen or citizens and / or Government of India or 75% by citizens or Governments of the participants. However, the products taken from vessels, engaged in commercial fishing under Bilateral Agreements, which provide for chartering/leasing of such vessels and/or sharing of catch between participants will also be eligible for preferential concessions. 4. In respect of vessels or factory ships operated by Government agencies, the requirement of flying the flag of a particular participant does not apply. 5. For the purpose of GSTP, the term factory ship means any vessel, as defined, used for processing and / or making on board products exclusively from those products referred to in clause (f). 6. Partial Cumulation as implied at above means that only products, which have acquired originating status in the territory of one participant, may be taken into account when used as inputs for a finished product eligible for preferential treatment in the territory of another participant. EIC/COO-Gen.Doc/Rev 2/ (11)

12 4.1 Introduction ASIA PACIFIC TRADE AGREEMENT (APTA) The Asia Pacific Trade Agreement (APTA) is a preferential trading arrangement designed to liberalise and expand trade in goods progressively in the Economic and Social Commission for Asia and Pacific (ESCAP) region. Agreement so far has been implemented by India, Bangladesh, Republic of Korea, Srilanka & China. Asia Pacific Trade Agreement (APTA) is a rename of the Bangkok Agreement (BA) from 1 st September The Bangkok Agreement was effective from 31 st July The declared objectives of APTA are: a. To promote and sustain mutual trade, and b. To develop economic co-operation among contracting countries; 4.2 Rules of Origin The objective of these rules is to determine the origin of products eligible for preferential concessions under APTA. Products, which have achieved the status originating in India, are eligible for preferential tariff treatment upon imports into participant countries Following products are considered as originating in India, if they are consigned directly to a participant country. a. Products that are wholly obtained in India, as defined at below. b. Products obtained in India in the manufacture of which, in addition to the materials referred to at below and materials originating in participant countries, materials imported from non participant countries and / or materials of undetermined origin are also used, provided the value of materials imported from non participant countries and / or materials of undetermined origin does not exceed 50% of the f.o.b. value of the product, subject to condition detailed at below For the purpose of (b), value of non-originating materials means the c.i.f. value at the time of importation of such materials or, if this is not known and cannot be ascertained and proved, the first ascertainable price paid for the materials in India Within the meaning of (a) above, the following are considered as wholly obtained in India. (a) (b) (c) (d) (e) raw or mineral products 1 extracted from its soil, its water or its seabed; agricultural products 2 harvested there; animals born and raised there; products obtained from animals referred to in clause (c) above; products obtained by hunting or fishing conducted there; EIC/COO-Gen.Doc/Rev 2/ (12)

13 (f) (g) (h) (i) (j) products of sea fishing and other marine products taken from the high seas by its vessels 3,4 ; products processed and/or made on board its factory ships 4,5 exclusively from products referred to in clause (f) above; used articles collected there, fit only for the recovery of raw materials; waste and scrap resulting from manufacturing operations conducted there; goods produced there exclusively from the products referred to in clauses (a) to (i) above Products which comply with origin requirements provided for at and which are used by a participant as input for a finished product eligible for preferential treatment by another participant are considered as a product originating in the territory of the participant where working or processing of the finished product has taken place provided that the aggregate content originating in the territory of the participant is not less than 60 per cent of its f.o.b. value The following are considered to be directly consigned from India to the importing country. a. If the products are transported without passing through the territory of any non participant country. b. The products whose transport involves transit through one or more non participant countries with or without transhipment or temporary storage in such countries; provided that (i) (ii) (iii) the transit entry is justified for geographical reason or by considerations related exclusively to transport requirements; the products have not entered into trade or consumption there; and The products have not undergone any operation there other than unloading and reloading or any operation required to keep them in good condition When determining the origin of the products, packing forms a whole with the product it contains. 4.3 Participant Countries People s Republic of Bangladesh Cambodia Republic of India The Philippines Republic of Korea Thailand Democratic Socialist Republic of Sri Lanka People s Republic of China EIC/COO-Gen.Doc/Rev 2/ (13)

14 4.4 Agencies Authorised to issue Certificates of Origin Various Export Development Authorities, Development Commissioners of EPZs / SEZs and the Export Inspection Agencies have been authorized to issue certificate of origin under APTA. 4.5 Fee Structure Sale price of blank form : Rs. 25/- per set/form Certification Fee : Rs 350 /- per set /form (Without Physical verification) Notes: ********** 1. Includes mineral fuels, lubricants and related materials as well as mineral or metal ores 2. Includes forestry products 3. Vessels shall refer to fishing vessels engaged in commercial fishing, registered in India and operated by Indian citizen(s) or Government or partnership, corporation or association, duly registered in India, at least 60 per cent of equity of which is owned by a citizen or citizens and / or Government of India or 75% by citizens or Governments of the participants. However, the products taken from vessels, engaged in commercial fishing under Bilateral Agreements, which provide for chartering/leasing of such vessels and/or sharing of catch between participants will also be eligible for preferential concessions. 4. In respect of vessels or factory ships operated by Government agencies, the requirement of flying the flag of a particular participant does not apply. 5. For the purpose of APTA, the term factory ship means any vessel, as defined, used for processing and / or making on board products exclusively from those products referred to in clause (f). 6. Partial Cumulation as implied by above means that only products, which have acquired originating status in the territory of one participant, may be taken into account when used as inputs for a finished product eligible for preferential treatment in the territory of another participant. EIC/COO-Gen.Doc/Rev 2/ (14)

15 5.1 Introduction SAARC PREFERENTIAL TRADING ARRANGEMENT (SAPTA) The Agreement on SAARC Preferential Trading Arrangement (SAPTA) was negotiated in the year 1993 by the 7 developing countries that were members of South Asian Association for Regional Cooperation (SAARC) The declared objectives of the SAPTA are: a. To promote and sustain mutual trade, and b. To develop economic co-operation among developing countries (members of Group of 77). 5.2 Rules of Origin The objective of these rules is to determine the origin of products eligible for preferential concessions under SAPTA. Products, which have achieved the status originating in India, are eligible for preferential tariff treatment upon imports into participant countries Following products are considered as originating in India, if they are consigned directly to a participant country. a. Products that are wholly obtained in India, as defined at below. b. Products obtained in India in the manufacture of which, in addition to the materials referred to at below and materials originating in participant countries, materials imported from non participant countries and / or materials of undetermined origin are also used, provided the value of materials imported from non participant countries and / or materials of undetermined origin does not exceed 50% of the f.o.b. value of the product, subject to condition detailed at 5 below For the purpose of (b), value of non-originating materials means the c.i.f. value at the time of importation of such materials or, if this is not known and cannot be ascertained and proved, the first ascertainable price paid for the materials in India Within the meaning of (a) above, the following are considered as wholly obtained in India. (a) (b) (c) (d) (e) (f) (g) raw or mineral products 1 extracted from its soil, its water or its seabed; agricultural products 2 harvested there; animals born and raised there; products obtained from animals referred to in clause (c) above; products obtained by hunting or fishing conducted there; products of sea fishing and other marine products taken from the high seas by its vessels 3,4 ; products processed and/or made on board its factory ships 4,5 exclusively from products referred to in clause (f) above; EIC/COO-Gen.Doc/Rev 2/ (15)

16 (h) (i) (j) used articles collected there, fit only for the recovery of raw materials; waste and scrap resulting from manufacturing operations conducted there; goods produced there exclusively from the products referred to in clauses (a) to (i) above Products which comply with origin requirements provided for at and which are used by a participant as input for a finished product eligible for preferential treatment by another participant are considered as a product originating in the territory of the participant where working or processing of the finished product has taken place provided that the aggregate content originating in the territory of the participant is not less than 60 per cent of its f.o.b. value The following are considered to be directly consigned from India to the importing country. a. If the products are transported without passing through the territory of any non participant country. b. The products whose transport involves transit through one or more non participant countries with or without transhipment or temporary storage in such countries; provided that (i) (ii) (iii) the transit entry is justified for geographical reason or by considerations related exclusively to transport requirements; the products have not entered into trade or consumption there; and The products have not undergone any operation there other than unloading and reloading or any operation required to keep them in good condition When determining the origin of the products, packing forms a whole with the product it contains. 5.3 Participant Countries People s Republic of Bangladesh Kingdom of Bhutan Republic of India Republic of Maldives Kingdom of Nepal Islamic Republic of Pakistan Democratic Socialist Republic of Sri Lanka 5.4 Agencies Authorised to issue Certificates of Origin Various Export Development Authorities, Development Commissioners of EPZs / SEZs and the Export Inspection Agencies have been authorized to issue certificate of origin under SAPTA. EIC/COO-Gen.Doc/Rev 2/ (16)

17 5.5 Fee Structure Sale price of blank form : Rs. 25/- per set/form. Certification Fee : Rs 350 /- per set /form (Without Physical verification) Notes: ********** 1. Includes mineral fuels, lubricants and related materials as well as mineral or metal ores. 2. Includes forestry products. 3. "Vessels shall refer to fishing vessels engaged in commercial fishing, registered in India and operated by Indian citizen(s) or Government or partnership, corporation or association, duly registered in India, at least 60 per cent of equity of which is owned by a citizen or citizens and / or Government of India or 75% by citizens or Governments of the participants. However, the products taken from vessels, engaged in commercial fishing under Bilateral Agreements, which provide for chartering/leasing of such vessels and/or sharing of catch between participants will also be eligible for preferential concessions. 4. In respect of vessels or factory ships operated by Government agencies, the requirement of flying the flag of a particular participant does not apply. 5. For the purpose of SAPTA, the term factory ship means any vessel, as defined, used for processing and / or making on board products exclusively from those products referred to in clause (f). 6. Partial Cumulation as implied by above means that only products, which have acquired originating status in the territory of one participant, may be taken into account when used as inputs for a finished product eligible for preferential treatment in the territory of another participant. EIC/COO-Gen.Doc/Rev 2/ (17)

18 6.1 Introduction INDO-SRI LANKA FREE TRADE AGREEMENT (ISFTA) An agreement for establishing a Free Trade Area was signed on 28 December 1998 between the Republic of India and the Democratic Socialist Republic of Sri Lanka. Subsequently, on 02 February 2000, a meeting between Secretary, Ministry of Commerce, Government of India and the Secretary, Treasury, Government of Sri Lanka was held in which it was decided that Export Inspection Council of India (EIC) will be the sole authority to issue certificates of origin in India, under the Agreement The objectives of this Agreement are: a) To promote through expansion of trade, the harmonious development of the economic relations between India and Sri Lanka. b) To provide fair conditions of competition for trade between India and Sri Lanka. c) To contribute in this way, by the removal of barriers to trade, to the harmonious development and expansion of world trade As per the Agreement, Government of Sri Lanka will accord tariff concessions to such Indian products upon their imports into Sri Lanka, except for products grouped in the Negative List of Sri Lanka, provided the products are originating in India and are directly consigned to Sri Lanka. 6.2 Rules of Origin The objective of these rules is to determine the origin of goods under the free trade agreement. Products, which have achieved the status originating in India, are eligible for preferential tariff treatment upon imports into Sri Lanka Following products are considered as originating in India. (a) (b) Products that are wholly obtained in India, as defined at below. Products obtained in India in the manufacture of which, in addition to the materials referred to at below, materials originating in Sri Lanka alone are also used, provided (i) (ii) that value addition in India is not less than 25% of the f.o.b. value of the product under export, and that aggregate value addition, that is, total value addition in India and Sri Lanka, is not less than 35% of the f.o.b. value of the product under export. EIC/COO-Gen.Doc/Rev 2/ (18)

19 (c) Products obtained in India in the manufacture of which, in addition to the materials referred to at below, materials imported from more than one country (whether or not including Sri Lanka) or of undetermined origin are also used, provided (i) (ii) the materials of imported or undetermined origin, used in the manufacture of the product, are subjected to sufficient working or processing in India, as defined at below, going beyond those described as insufficient working or processing at below, and the value of such materials of imported or undetermined origin does not exceed 65% of the f.o.b. value of the product Within the meaning of (a) above, the following are considered as wholly obtained in India. (a) raw or mineral products i extracted from its soil, its water or its seabed; (b) vegetable products ii harvested there; (c) animals born and raised there; (d) products obtained from animals referred to in clause (c) above; (e) products obtained by hunting or fishing conducted there; (f) products of sea fishing and other marine products taken from the high seas by its vessels 3,4 ; (g) products processed and/or made on board its factory ships 4,5 exclusively from products referred to in clause (f) above; (h) used articles collected there, fit only for the recovery of raw materials; (i) waste and scrap resulting from manufacturing operations conducted there; (j) products extracted from the seabed or below seabed which is situated outside its territorial waters, provided that it has exclusive exploitation rights; (k) goods produced there exclusively from the products referred to in clauses (a) to (j) above Within the meaning of (c) (i) above, materials of imported / undetermined origin will be considered to be sufficiently worked or processed when the product obtained is classified in a heading (at the 4 digit level) of Harmonised Commodity Description & Coding System (HS), which is different from those in which such materials of imported / undetermined origin are classified The following are, in any event, considered as insufficient working or processing, that would not confer the status of originating products regardless of whether or not the requirements of (c) (ii) or above are satisfied. (a) Operations to ensure the preservation of products in good condition during transport and storage (ventilation, spreading out, drying, chilling, placing in salt, sulphur dioxide or other aqueous solutions, removal of damaged parts, and like operations). EIC/COO-Gen.Doc/Rev 2/ (19)

20 (b) Simple operations consisting of removal of dust, sifting or screening, sorting, classifying, matching (including the making-up of sets of articles), washing, painting, cutting up; (c) (i) changes of packing and breaking up and assembly of consignments, (ii) simple slicing, cutting and repacking or placing in bottles, flasks, bags, boxes, fixing on cards or boards, etc., and all other simple packing operations. (d) (e) (f) (g) (h) affixing of marks, labels or other like distinguishing signs on products or their packaging; simple mixing of products, whether or not of different kinds, where one or more components of the mixture do not meet the conditions laid down in these Rules to enable them to be considered as originating products; simple assembly of parts of products to constitute a complete product; a combination of two or more operations specified in (a) to (f); slaughter of animals For the purpose of (c) (ii), value of non-originating materials means the c.i.f. value at the time of importation of such materials or, if this is not known and cannot be ascertained and proved, the first ascertainable price paid for the materials in India The following are considered to be directly consigned from India to Sri Lanka. (a) (b) If the products are transported without passing through the territory of any country other than India and Sri Lanka. The products whose transport involves transit through one or more intermediate countries with or without transhipment or temporary storage in such countries; provided that (i) (ii) (iii) the transit entry is justified for geographical reason or by considerations related exclusively to transport requirements; the products have not entered into trade or consumption there; and the products have not undergone any operation there other than unloading and reloading or any operation required to keep them in good condition When determining the origin of the products, packing forms a whole with the product it contains. 6.3 Certificate of Origin The first consignment of a particular product of a particular exporter is certified only after Physical Verification that origin criterion / value addition norm prescribed at 6.2 above is actually being met. Continued compliance to prescribed origin criterion / value addition norm is to be assessed on a periodic basis at a frequency of 1 in 20 consignments, for each product. Depending upon the performance observed in the last 1 year, the In-charge of the Agency has the discretion to change this frequency for a EIC/COO-Gen.Doc/Rev 2/ (20)

21 product of an exporter subject to the condition that physical verification is carried out at least once in a year for each product. Physical verification has been prescribed primarily for ensuring that origin criteria / value addition norms are actually being met before a certificate is issued for a particular product In the case of application of (b), the certifying authorities will rely upon certificates of origin issued by the Director General of Commerce, Sri Lanka as evidence of material originating in Sri Lanka. 6.4 Agencies Authorised to issue Certificates of Origin Export Inspection Council of India, through its field organizations, the Export Inspection Agencies, is the sole authority for issue of certificates of origin under ISFTA. 6.5 Fee Structure Sale price of blank form Certification Fee Fee for physical verification : Rs. 25/- per set / form. : Rs 350 /- per set / form (without physical verification). : Rs. 500/- per man-day plus actual cost of transportation. Notes: ********** 1. Includes mineral fuels, lubricants and related materials as well as mineral or metal ores. 2. Includes agricultural and forestry products. 3. Vessels shall refer to fishing vessels engaged in commercial fishing, registered in India and operated by Indian citizen(s) or partnership, corporation or association, duly registered in India, at least 60 per cent of equity of which is owned by a citizen or citizens and / or Government of India or 75% by citizens and / or Governments of India and Sri Lanka. However, the products taken from vessels, engaged in commercial fishing under Bilateral Agreements which provide for chartering / leasing of such vessels and/or sharing of catch between India and Sri Lanka will also be eligible for preferential treatment. 4. In respect of vessels or factory ships operated by Government agencies, the requirement of flying the flag of the Contracting Party does not apply. 5. For the purpose of ISFTA, the term factory ship means any vessel, as defined, used for processing and / or making on board products exclusively from those products referred to in clause (f). EIC/COO-Gen.Doc/Rev 2/ (21)

22 INDIA AFGHANISTAN PREFERENTIAL TRADE AGREEMENT (IAPTA) 7.1 Introduction A bilateral Preferential Trade Agreement was signed on 6 th March 2003 between the Governments of India and Afghanistan. Under this Agreement, while India agreed to grant tariff concessions to 38 commodities (at six digit level) originating in Afghanistan, 8 Indian commodities (at six digit level) comprising Black Tea; Ayurvedic & Homeopathic Medicines; Refined Sugar; Cement; Antisera & other Blood Preparations etc., will get duty-free entry into Afghanistan. Subsequently, Ministry of Commerce & Industry, Government of India had decided to authorise Export Inspection Council of India (EIC) to issue certificates of origin under IAPTA The objectives of this Agreement are: a) To promote through expansion of trade, the harmonious development of the economic relations between India and Afghanistan. b) To provide fair conditions of competition for trade between India and Afghanistan. c) To pay due regard to the principle of reciprocity in the implementation of this agreement. d) To contribute in this way, by the removal of barriers to trade, to the harmonious development and expansion of world trade As per the Agreement, Government of Afghanistan will accord tariff concessions to identified Indian products provided the products are originating in India and are directly consigned to Afghanistan. 7.2 Rules of Origin The objective of these rules is to determine the origin of goods under the preferential Trade agreement. Products, which have achieved the status originating in India, are eligible for preferential tariff treatment upon imports into Afghanistan Following products are considered as originating in India. (a) (b) Products that are wholly obtained in India, as defined at below. Products obtained in India in the manufacture of which, in addition to the materials referred to at below, materials originating in Afghanistan alone are also used, provided - (i) that value addition in India is not less than 30% of the f.o.b. value of the product under export, and (ii) that aggregate value addition, that is, total value addition in India and Afghanistan, is not less than 40% of the f.o.b. value of the product under export. EIC/COO-Gen.Doc/Rev 2/ (22)

23 (c) Products obtained in India in the manufacture of which, in addition to the materials referred to at below, materials imported from more than one country (whether or not including Afghanistan) or of undetermined origin are also used, provided (i) the materials of imported or undetermined origin, used in the manufacture of the product, are subjected to sufficient working or processing in India, as defined at below, going beyond those described as insufficient working or processing at below, and (ii) the value of such materials of imported or undetermined origin does not exceed 50% of the f.o.b. value of the product Within the meaning of (a) above, the following is to be considered as wholly obtained in India. (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) raw or mineral products iii extracted from its soil, its water or its seabed; vegetable products iv harvested there; animals born and raised there; products obtained from animals referred to in clause (c) above; products obtained by hunting or fishing conducted there; products of sea fishing and other marine products taken from the high seas by its vessels 3,4 ; products processed and/or made on board its factory ships exclusively from products referred to in clause (f) above 4,5 ; used articles collected there, fit only for the recovery of raw materials; waste and scrap resulting from manufacturing operations conducted there; products extracted from the seabed or below seabed which is situated outside its territorial waters, provided that it has exclusive exploitation rights; goods produced there exclusively from the products referred to in clauses (a) to (j) above Within the meaning of (c) (i) above, materials of imported / undetermined origin will be considered to be sufficiently worked or processed when the product obtained is classified in a heading (at the 4 digit level) of Harmonised Commodity Description & Coding System (HS), which is different from those in which such materials of imported / undetermined origin used in its manufacture are classified The following will, in any event, be considered as insufficient working or processing, that would not confer the status of originating products regardless of whether or not the requirements of (c) (ii) or above are satisfied. (a) (b) Operations to ensure the preservation of products in good condition during transport and storage (ventilation, spreading out, drying, chilling, placing in salt, sulphur dioxide or other aqueous solutions, removal of damaged parts, and like operations). Simple operations consisting of removal of dust, sifting or screening, sorting, classifying, matching (including the making-up of sets of articles), washing, painting, cutting up; EIC/COO-Gen.Doc/Rev 2/ (23)

24 (i) (ii) (c) (d) (e) (f) (g) changes of packing and breaking up and assembly of consignments, simple slicing, cutting and repacking or placing in bottles, flasks, bags, boxes, fixing on cards or boards, etc., and all other simple packing operations. affixing of marks, labels or other like distinguishing signs on products or their packaging; simple mixing of products, whether or not of different kinds, where one or more components of the mixture do not meet the conditions laid down in these Rules to enable them to be considered as originating products; simple assembly of parts of products to constitute a complete product; a combination of two or more operations specified in (a) to (f); slaughter of animals For the purpose of (c) (ii), value of non-originating materials means the c.i.f. value at the time of importation of such materials or, if this is not known and cannot be ascertained and proved, the first ascertainable price paid for the materials in India The following shall be considered to be directly consigned from India to Afghanistan. (a) (b) If the products are transported without passing through the territory of any country other than India and Afghanistan. The products whose transport involves transit through one or more intermediate countries with or without transhipment or temporary storage in such countries; provided that (i) the transit entry is justified for geographical reason or by considerations related exclusively to transport requirements; (ii) the products have not entered into trade or consumption there; and (iii) The products have not undergone any operation there other than unloading and reloading or any operation required to keep them in good condition When determining the origin of the products, packing shall form a whole with the product it contains. EIC/COO-Gen.Doc/Rev 2/ (24)

25 7.3 Certificate of Origin The first consignment of a particular product of a particular exporter is certified only after Physical Verification that origin criterion / value addition norm prescribed at 7.2 above is actually being met. Continued compliance to prescribed origin criterion / value addition norm is to be assessed on a periodic basis at a frequency of 1 in 20 consignments, for each product. Depending upon the performance observed in the last one year, the In-charge of the Agency has the discretion to change this frequency for a product of an exporter subject to the condition that physical verification is carried out at least once in a year for each product. Physical verification has been prescribed primarily for ensuring that origin criteria / value addition norms are actually being met before a certificate is issued for a particular product. 7.4 Fee Structure Sale price of blank form : Rs. 25/- per set / form. Certification Fee : Rs 350 /- per set / form (without physical verification). Fee for physical verification : Rs. 500/- per man-day plus actual cost of transportation. Notes: ********** 1. Includes mineral fuels, lubricants and related materials as well as mineral or metal ores. 2. Includes agricultural and forestry products. 3. Vessels shall refer to fishing vessels engaged in commercial fishing, registered in India and operated by Indian citizen(s) or partnership, corporation or association, duly registered in India, at least 60 per cent of equity of which is owned by a citizen or citizens and / or Government of India. However, the products taken from vessels, engaged in commercial fishing under Bilateral Agreements, which provide for chartering / leasing of such vessels and/or sharing of catch between India and Afghanistan will also be eligible for preferential treatment. 4. In respect of vessels or factory ships operated by Government agencies, the requirements of flying the flag of the Contracting Party does not apply. 5. For the purpose of IAPTA, the term factory ship means any vessel, as defined, used for processing and / or making on board products exclusively from those products referred to in clause (f). EIC/COO-Gen.Doc/Rev 2/ (25)

26 8.1 Introduction SOUTH ASIAN FREE TRADE AREA The Agreement on South Asian Free Trade Area was signed in between the Governments of SAARC Member States comprising the Peoples Republic of Bangladesh, the Kingdom of Bhutan, the Republic of India, the Republic of Maldives, the Kingdom of Nepal, the Islamic Republic of Pakistan and Democratic Socialist Republic of Sri Lanka The declared objectives of the SAFTA are to promote and enhance mutual trade and economic cooperation among contracting States; The contracting states will accord tariff concession to identified products provided the products are originating in contracting State and are directly consigned to the Member State. 8.2 Rule of Origin The objective of these rules is to determine the origin of products eligible for preferential concessions under SAFTA. Products, which have achieved originating status in India, are eligible for preferential tariff upon import into participant country Following products are considered as originating in India (a) Products are wholly obtained in India, as defined at (b) Not wholly produced or obtained Products not wholly produced or obtained shall be subject to Rule and any of the conditions prescribed under Rule , Rule or Rule Within the meaning of 8.2.2(a) the following are considered wholly produced or obtained in India as a) raw or mineral products extracted from its soil, its water or its sea bed extending upto its seabed or continental shelf; b) Agriculture, vegetable and forestry products harvested there; c) animals born and raised there; d) products obtained from animals referred to in clause (c) above; e) products obtained by hunting of fishing conducted there, f) products of sea fishing and other marine products from the high seas by its vessels; g) products processed and /or made on board its factory ships exclusively from products referred to in clause (f) above; h) raw materials recovered from used articles collected there; i) waste and scrap resulting from manufacturing operations conducted there; j) products taken from the seabed, ocean floor or subsoil thereof beyond the limits of national jurisdiction, provided it has the exclusive rights to exploit that sea bed, ocean floor or subsoil thereof; k) goods produced there exclusively from the products referred to in clauses (a) to (j) above. EIC/COO-Gen.Doc/Rev 2/ (26)