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SN Panigrahi is a Versatile Practitioner, Strategist, Energetic Coach, Learning Enabler & Public Speaker.
He is an International-Corporate Trainer, Mentor & Author
He has diverse experience and expertise in Project Management, Contract
Management, Supply Chain Management, Procurement, Strategic
Sourcing, Global Sourcing, Logistics, Exports & Imports, Indirect Taxes –
GST etc.
He had done more than 150 Workshops on above
Published more than 500 Articles; More than 90 Youtube Presentations &
90 SlideShares
He is an Engineer + MBA +PGD ISO 9000 / TQM with around 29 Yrs of
Experience
He is a certified PMP® from PMI (USA) and become PMI India Champion
Also a Certified Lean Six Sigma Black Belt from Exemplar Global & KPMG
Have been Trained in COD for 31/2 Yrs. on Strategy & Leadership
GST Certified – MSME – Tech. Dev. Centre (Govt of India)
ZED Consultant – Certified by QCI – MSME (Govt of India)
Member Board of Studies, IIMM
SN Panigrahi
9652571117 Co-Chairman, Indirect Tax Committee, FTAPCCI
snpanigrahi1963@gmail.com
Hyderabad Empanelled Faculty in NI MSME
He has shared his domain expertise in various forums as a speaker & presented a number of papers in various national and
international public forums and received a number of awards for his writings and contribution to business thoughts.
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“It has been observed that imports under Free Trade
Agreements (FTA) are on the rise. Undue claims of FTA
benefits have posed a threat to domestic industry. It is
sometimes flouted by importers to wrongly claim that a
particular import is originating from an FTA partner country so
as to pocket the benefits.
Such imports require stringent checks to curb misuse of FTA
Provisions. Accordingly, steps are being taken to crack down on
frauds, re-work Rules of Origin (RoO) provisions. RoO
determine whether enough value addition took place in the FTA
partner country for the import to qualify as originating from
there.
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The government has come out with norms for the enforcement of
‘Rules of Origin' provisions for allowing Preferential Rate
of Customs Duties on Products Imported under Free Trade
Agreements aiming at striking a delicate balance in its efforts to
check misuse of FTAs by unscrupulous importers and ensuring that
their use by legitimate businesses is not discouraged.
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RoOs are meant to define the ‘nationality’ of imports and to make PTAs preferential. Countries
enter into Free Trade Agreements with each other in order to provide enhanced, Preferential
Market Access Opportunities to one another. But in order to put these into practice, it is
necessary to have Criteria that tell us when products come from the partner country to whom
such preferential access is given, and are not Re-Exported from another source (Country).
"Rules of Origin” are the criteria needed to determine the national origin of a product.
Countries which offer zero or reduced duty access to imports from certain trade partners often
apply a set of preferential rules of origin to determine the eligibility of products to receive
preferential access.
The new norms have been framed with a view to put in place greater scrutiny of imports and
checking inbound shipments of low-quality products and dumping of goods by a third country
routed through an FTA partner country.
The ‘’Rules of Origin'' provision prescribes for the minimal processing that should happen in
the FTA country so that the final manufactured product may be called originating goods in that
country.
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India has signed limited Free Trade Agreements with Sri Lanka (1998) and
Thailand (2003) plus a number of preferential trade agreements (tariff
concession schemes) with countries/blocs such as Afghanistan, Nepal,
Chile and Mercosur. India also signed FTAs with ASEAN (2009), Korea
(2009) and Japan (2010) as well. Negotiations are underway with EU, UK &
US.
Under such agreements, two trading partners significantly reduce or
eliminate import / customs duties on the maximum number of goods traded
between them
As per New Rules of Origin, a country that has inked an FTA with India
cannot dump goods from some third country in the Indian market by just
putting a label on it. It has to undertake a prescribed value addition in that
product to export to India. Rules of origin norms help contain dumping of
goods.
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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.
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There have been many incidents, where certain players have imported products with an origin of
certificate that does not accurately reflect the country where these products have been actually
manufactured.
The TV industry has been one of the key sectors that has been raising concerns about misuse of
FTAs, as there is surge of import of televisions from Vietnam (which is part of the India-ASEAN
FTA).
India’s imports of copper, RBD (refined, bleached and de-odorized) palm-olein, paper and
paperboard are mostly effected due to flouting of ‘Rules of Origin’ and dumping of these
commodities under Free Trade Agreements (FTAs) from non-producing countries. Import of
paper and paperboards from non-producing countries is a matter of great concerns for Indian
manufacturers.
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Import of RBD (refined, bleached and
deodorised) Palm-olein from Nepal is feared to have
originated from Malaysia.
While direct import of Palm-olein attracts customs
duty of 44.5 per cent, import through Nepal could be
possible at ‘Nil’ duty under the South Asian Free
Trade Area (SAFTA).
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The government had levied MIP after pepper traders and
exporters complained that Vietnamese pepper was coming to
India via Sri Lanka with certificate of origin issued by the latter.
Currently, India levies zero duty import on 2,500 tonnes of pepper
from Sri Lanka annually under the Indo-Sri Lanka Free Trade
Agreement.
Any export above the limit is subjected to 8 per cent duty under
South Asia Free Trade Agreement, as against the usual customs
duty of 70 per cent on pepper import into India.
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Each Trade Agreement, has its own set of Rules of Origin. Say under the FTA, 35 per cent value
addition by the exporting country on free-on-board (FOB) value of goods is a required, then exporters
adding shipping and other miscellaneous costs including handling, loading and unloading to achieve
the mandatory norms of 35 per cent value addition.
“Value addition of 35 per cent is impossible in the case of copper. Huge quantities of refined copper
bars that were being imported from Sri Lanka and Vietnam until recently, got curbed automatically after
the Indian government removed copper bar from the FTA commodities list. Similarly, import of copper
from other FTA countries can also be restricted for the benefit of local producers,”
Likewise, there are many instances of misuse of FTA provisions detected and evidences from recent
FTAs suggest un-favourable gains to our trade partners.
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The Salient Features of the
“CAROTAR, 2020”
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Certificate of Origin (CoO)
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Preferential Non-Preferential
Change in Tariff
Value Content Value Content + CTC
Classification (CTC)
Check if Build up or
Check if HS of Non-
Build Down Method
Originating
has been Applied
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