Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between India and the United Arab Emirates)  Rules, 2022

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS)

NOTIFICATION

New Delhi, the 30th April, 2022

No. 39/2022-Customs (N.T.)

G.S.R. 329(E).—In exercise of the powers conferred by sub-section (1) of section 5  of  the Customs Tariff Act, 1975 (51 of 1975), the Central Government hereby makes the  following rules, namely:-

1. Short title and commencement. - (1) These rules may be called the Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between India and the United Arab Emirates) Rules, 2022.

Customs Tariff Rules, 2022

(2) They shall come into force on the 1st day of May, 2022.

2. Definitions. - In these rules, unless the context otherwise requires, -

(a) “agreement” means Comprehensive Economic Partnership Agreement made between the Government of the Republic of India and the Government of the United Arab Emirates;

(b) “aquaculture” means the farming of aquatic organisms including fish, molluscs, crustaceans, other aquatic invertebrates, and aquatic plants, from seedstock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production, such as, regular stocking, feeding, protection from predators;

(c) “carrier” means any vehicle for air, sea and land transport. However, the carriage of product can be made through multimodal transport;

(d) “CIF value” means the price actually paid or payable to the exporter for the product when the product is loaded out of the carrier, at the port of importation, including the cost of the product, insurance, and freight necessary to deliver the product to the named port of destination. The valuation shall be made in accordance with Article VII of the General Agreement on Tariffs and Trade 1994, including its notes and supplementary provision thereof and, the Customs Valuation Agreement;

(e) “competent authority” means:

  • (1) for Government of the Republic of India, the Department of Commerce or the Central Board of Indirect Taxes and Customs or any other agency as notified from time to time; and

  • (2) for Government of the United Arab Emirates, the Ministry of Economy or any other agency as notified from time to time;

(f) “Customs Administration” means:

  • (1) for Government of the Republic of India, the Central Board of Indirect Taxes and Customs; and

  • (2) for Government of the United Arab Emirates, the Federal Customs Authority;

(g) “Customs Valuation Agreement” means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, set out in Annex 1A to the WTO Agreement;

(h) “customs value” means the value of the product as determined in accordance with Article VII of the General Agreement on Tariffs and Trade 1994, including its notes and supplementary provisions thereof and the Customs Valuation Agreement;

(i) “days” means calendar days, including weekends and holidays;

(j) “Ex-Works price” means the price paid for the product ex-works to the manufacturer in the Party where the last working or processing is carried out, provided the price includes the value of all the materials used;

(k) “Free-On-Board (FOB) value” means the price actually paid or payable to the exporter for the product when loaded onto the carrier at the named port of exportation, including the cost of the product, and all costs necessary to bring the product onto the carrier;

(l) “GATT 1994” means the General Agreement on Tariffs and Trade 1994, set out in Annex 1A to the WTO Agreement;

(m) “generally accepted accounting principles (GAAP)” means the recognised consensus or substantial authoritative support in the territory of a Party, with respect to the recording of revenues, expenses, costs, assets, and liabilities, the disclosure of information and the preparation of financial statements. These standards may encompass broad guidelines of general application as well as detailed standards, practices and procedures;

(n) “Harmonised System (HS)” means the Harmonised Commodity Description and Coding System, including its general rules and legal notes, set out in the Annex to the International Convention on the Harmonised Commodity Description and Coding System. However, based on the HS, the Parties could make any amendments which may be adopted and implemented by the Parties in their respective tariff schedules;

(o) “indirect material” means a material used in the production, testing or inspection of the product or the operation of equipment associated with the production of the product but not physically incorporated into the product, including:

  • (1) fuel and energy;

  • (2) tools, dies and moulds;

  • (3) spare parts and materials used in maintenance of equipment;

  • (4) lubricants,  greases,  compounding  materials  used  in  production  or  used  to  operate equipment;

  • (5) gloves, glasses, footwear, clothing and safety equipment;

  • (6) equipment, devices, supplies used for testing or inspecting of products;

  • (7) catalysts and solvents; and

  • (8) any other material that is not incorporated into the product but for which the use in the production of the products can be reasonably demonstrated to be a part of that production;

(p) “issuing authority” means the authority designated by each Party for issuance of certificate of origin and referred in list of issuing authorities for each Party given in Annexure-C and Annexure-D of these rules;

(q) “manufacture” means any kind of working or processing, or specific operations but does not include simple assembly;

(r) “material” means any ingredient, raw input, component or part used in the production of a product and physically incorporated into it;

(s) “measure” means any measure, whether in the form of a law, regulation, rule, procedure, decision, practice, administrative action, or any other form;

(t) “non-originating material (NOM)” means any materials whose country of origin is a country other than the Parties or a material whose origin cannot be determined or a material that does not qualify as originating under these rules;

(u) “originating material” means materials that qualify as originating under these rules;

(v) “Parties” means the Government of the United Arab Emirates and the Government of the Republic of India;

(w) “Party” means the Government of the United Arab Emirates or the Government of the Republic of India;

(x) “product” means that which is obtained by growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting, extracting or manufactured, even if it is intended for later use in another manufacturing operation;

(y) “production” means growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting, manufacturing and processing;

(z) “tariff classification” means the classification of a product according to the HS, including its General Interpretative Rules and Explanatory Notes thereof;

(za) “territorial waters” means waters extending up to twelve nautical miles from the baseline in accordance with applicable rules of international law;

(zb) “value of non-originating materials” means the CIF value at the time of importation of the non- originating materials used or if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the territory of a Party.

(zc)      “WTO” means the World Trade Organization; and

(zd) “WTO Agreement” means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, on the 15th April 1994.

3. Origin Criteria.-  (1)  The product shall be deemed to be originating in a Party and shall be eligible for preferential treatment provided it:

  • (i) is wholly obtained or produced in the territory of the Party as per rule 4; or

  • (ii) has undergone sufficient  working or production as per  the  Product  Specific Rules in Annexure-B.

(2) The producer or manufacturer has the option to use either of the following two methods of computing the value addition criteria in the Product Specific Rules at Annexure-B of these rules:

(a) Value Addition = [(FOB value or Ex-Works price) – (Value of NOM)] / [FOB value or Ex- Works price] or

(b) Value Addition = [Cost of originating material + direct labour cost + direct overhead cost] / [FOB value or Ex-Works price]

Explanation: For the purposes of sub-rule (2), the differences in value addition percentages depending on the methodology i.e., FOB value or Ex Works price, are defined in Annexure-B of these rules;

(3) Notwithstanding anything contained in sub-rule (1), the final manufacture before export must have occurred in the Party of export.

4. Wholly obtained or produced product.- The following products shall be considered as being wholly obtained or produced in the territory of a Party, namely:-

(a) plant and plant product grown and harvested there;

(b) live animals born and raised there;

(c) products obtained from live animals there;

(d) mineral product and natural resources extracted or taken from that Party’s soil, waters, seabed or beneath the seabed;

(e) product obtained from hunting, trapping, fishing or aquaculture conducted there;

(f) product of sea fishing and other marine products taken from outside its territorial waters by a vessel and/or produced by a factory ship registered, recorded or licensed with a Party and flying its flag;

(g) product, other than products of sea fishing and other marine products, taken or extracted from the seabed or the subsoil of the continental shelf or the exclusive economic zone of any of the Parties;

(h) waste or scrap resulting from consumption or manufacturing operations conducted in the territory of that Party, fit only for disposal or recovery of raw materials; and

(i) product produced in the territory of that Party exclusively from product referred to in clauses (a) to (h)............................ Click here to read more.

Source: https://egazette.nic.in/WriteReadData/2022/235479.pdf

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