81-2020 - Customs (N.T.)
81-2020 - Customs (N.T.)
81-2020 - Customs (N.T.)
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification
New Delhi, the 21st August, 2020
G.S.R. ________ (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, -
(b) “Preferential rate of duty” means rate at which customs duty is charged 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);
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(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.
(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
(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;
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(d) is issued for an item which is not eligible for preferential tariff treatment
under the trade agreement;
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.
(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.
(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.
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(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:
(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
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.
(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:
(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,
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(a) the preferential tariff treatment of such goods may be suspended till
conclusion of the verification;
(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 foty 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:
(7) The proper officer may deny claim of preferential rate of duty without further
verification where:
(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.
(2) Where a claim on identical goods is rejected under sub-rule (1), the Principal
Commissioner of Customs or the Commissioner of Customs shall,
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(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
(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
Section I
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.
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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. Value 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
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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.
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.
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Is Imported Good
Wholly Obtained (WO)?
No
Yes
Originating
Uses Non Originating
Material
Check if Build up or
Build Down method Check HS of non-
originating
has been applied
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Section II
Section III
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.
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Examples:
Note 2: If the goods are not wholly obtained, the manufacturing/processing undertaken in
country of origin must be ascertained.
1.
2.
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”.
1.
2.
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Note: If origin of any of the components used in manufacture of final good cannot be
ascertained, same should be treated as non-originating.
2.
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h. Has the consignment in question been o Yes
directly shipped from country of o No
origin? If not, then has it been ascertained that same
is as per provisions of the concerned
agreement?
(Ananth Rathakrishnan)
Deputy Secretary to the Government of India
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