A valid Certificate of Origin can take your duty rate to zero. Presenting it late, or without the origin evidence CAROTAR now requires, takes it back to full.
India has trade agreements with ASEAN, Japan, Korea, Australia, the UAE and others. Where one applies to your goods, the Basic Customs Duty can fall substantially — often to zero. The mechanism for claiming it is the Certificate of Origin.
What a Certificate of Origin does
It certifies that the goods originate in the partner country under that agreement's rules of origin. Presented with your Bill of Entry, it entitles you to the preferential rate instead of the standard one.
The certificate must be:
- Issued by the designated authority in the exporting country
- In the prescribed format for that specific agreement
- Valid at the time of importation
- Consistent with the invoice, packing list and Bill of Entry in every particular
Rules of origin
Goods must actually qualify. Broadly, either:
- Wholly obtained in the partner country — mined, grown or harvested there; or
- Substantially transformed there, satisfying that agreement's test
The substantial transformation test varies. Common forms are a change in tariff heading, a minimum regional value content (often 35–40%), or a specific process requirement. Goods merely trans-shipped through a partner country do not qualify, however the paperwork is arranged.
CAROTAR: the obligation sits with you
Since the Customs (Administration of Rules of Origin under Trade Agreements) Rules came into force, presenting a certificate is no longer enough. As the importer you must:
- Hold information about the origin criteria the goods satisfy, not just the certificate
- Exercise reasonable care that the claim is correct
- Produce that information within a set period if customs asks
- Retain the supporting records for five years
If you cannot substantiate the origin claim when asked, the preferential rate is denied, differential duty becomes payable with interest, and a penalty may follow. The certificate protects you only if the underlying claim is genuinely sound.
Practically, this means asking your supplier — at the purchase order stage — for the origin criterion applied and the production details behind it. Suppliers who cannot answer that question are a risk.
Timing
The certificate must be available at the time of assessment. If it arrives afterwards you pay full duty and then pursue a refund, which is slow and frequently unsuccessful.
Treat the Certificate of Origin as a pre-shipment document: confirm the supplier has applied for it before the container is loaded, and get a scan before the vessel sails.
Common failures
- Format mismatch — the wrong agreement's form for the claim being made
- Description mismatch — certificate wording that does not match the invoice
- Third-country invoicing without the required declaration on the certificate
- Expired certificate by the time of assessment
- No origin evidence behind the certificate when CAROTAR information is requested
Worth the effort
On a consignment attracting 10% BCD, a valid FTA claim is a direct saving of 10% of assessable value plus the surcharge computed on it. On regular volumes that is a substantial line item — provided the claim is properly supported.
Not sure whether your goods qualify, or what your supplier needs to provide? Send us the product and origin details and we will check it against the agreement.
