The Central Board of Indirect Taxes and Customs has notified the Rules of Origin (RoOs) under the India-Australia economic cooperation and trade agreement (ECTA).
Key points
- The notification, which relates to the eligibility requirement to claim the preferential customs duty on trade in goods, under the ECTA, will come into effect from December 29.
- The Customs Tariff (Determination of Origin of Goods under the India-Australia Economic Cooperation and Trade Agreement) Rules, 2022, notification by the CBIC lays out the origin criteria based on which the product would be eligible for the preferential customs duty.
- RoOs specify the threshold for value addition in the country concerned to qualify for the tax concessions under the FTA, so that the benefits are not misused by firms based in other countries.
About Rules of origin
- Rules of origin are the criteria needed to determine the national source of a product. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports.
- GATT has no specific rules governing the determination of the country of origin of goods in international commerce. Each contracting party was free to determine its own origin rules, and could even maintain several different rules of origin depending on the purpose of the particular regulation.
Rules of origin are used:
- to implement measures and instruments of commercial policy such as anti-dumping duties and safeguard measures;
- to determine whether imported products shall receive most-favoured-nation (MFN) treatment or preferential treatment;
- for the purpose of trade statistics;
- for the application of labelling and marking requirements; and
- for government procurement.
