Question 1

Which legal framework governs FTA origin certification in India?

Accepted Answer

Origin certification is governed by the Customs Act 1962 (Section 157 read with Section 28DA for preferential tariff claims) and the rules notified under each specific FTA — for example, the ASEAN-India FTA Rules of Origin are prescribed under Customs Notification No. 46/2011-Customs (NT) and the CEPA agreements (India-UAE, India-Australia) have their own separate origin procedures notified via Customs notifications.

Question 2

What is the Wholly Obtained or Substantial Transformation test and which agreements use each?

Accepted Answer

Most Indian FTAs apply a combination of: (a) Change in Tariff Classification (CTC) at the HS chapter/heading/sub-heading level, (b) a Regional Value Content (RVC) threshold (typically 35-40%), or (c) specific process rules — all defined in the Product Specific Rules (PSRs) annexed to the relevant FTA notification. India-Sri Lanka FTA (Customs Notification No. 26/2000-Customs) uses a simpler 35% RVC test; India-UAE CEPA (Customs Notification No. 22/2022-Customs) uses a dual CTC + 40% RVC criterion for most goods.

Question 3

Who is the designated issuing authority for Certificates of Origin under Indian FTAs?

Accepted Answer

Authority depends on the FTA: Export Inspection Council (EIC) and Export Inspection Agencies (EIAs) issue certificates under most FTAs including AIFTA and SAFTA; the Development Commissioner of SEZs for SEZ exporters; and recognised Export Promotion Councils for specific product categories. The DGFT administers self-certification pilots under schemes like the Approved Exporter (AE) scheme notified under Foreign Trade Policy 2023 para 2.108.

Question 4

What documents must a CA or the exporter maintain to substantiate origin at the time of customs audit?

Accepted Answer

Under Section 28DA of the Customs Act 1962, the importer claiming preferential duty must possess a valid Certificate of Origin and provide it to Customs on demand. The exporter must retain for five years: supplier declarations, production records showing CTC or RVC calculation worksheets, purchase invoices for imported inputs with country of origin, and the Bill of Export or Shipping Bill. CBIC Circular No. 38/2016-Customs sets out the verification procedure Customs follows when a preferential claim is challenged.

Question 5

What is the penalty exposure if a Certificate of Origin is found to be incorrect?

Accepted Answer

A false or fraudulently obtained Certificate of Origin can attract recovery of the differential duty foregone under Section 28 of the Customs Act 1962, plus interest under Section 28AA, and penalty up to the value of goods under Section 114A. Where fraud is established, prosecution under Section 135 is also possible. CBIC has issued specific guidelines on post-import verification of FTA claims through Circular No. 10/2019-Customs.

Fta Origin Certification

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