Certificate of origin

Definition: Certificate of origin is a document which certify that the goods shipped under a particular shipment are obtained in a particular country. 

Certificate of origins are of two types:

1. Non-preferential Certificate of Origin

2. Preferential Certificate of Origin

 

Let us discuss about both in detail. 

1. Non-preferential Certificate of Origin

A Non-preferential Certificate of origin is a document which certify the origin of the goods. Non-preferential Certificate of origins are issued by local Chamber of commerce.

Non-preferential Certificate of origin can be used only to prove the origin of the goods, it cannot be used to claim duty/tariff benefit.

 2. Preferential Certificate of Origin

When two or more countries enters to bilateral or multilateral trade agreement (free trade area) importers of these countries get some benefits like import duty exemption if some goods are imported from the countries under that trade agreement.

The certificate of origin which is issued under these trade agreements and avail duty benefit is called as preferential certificate of origin. There are few organizations which are given authority to issue preferential certificate of origin, Export inspection council is one of those.

 

Example: Let us assume Exporter A is from India exporting 5000 metric tons of yellow maize to Importer B at Vietnam. India & Vietnam has free trade agreement named AIFTA. At the time of export A will approach local office of Export inspection council along with documents like Invoice, BL application form etc., Export inspection council will issue AIFTA certificate (preferential certificate of origin) to A, A will send the certificate to B along with remaining post shipment documents, B will submit the AIFTA certificate at custom department and claim duty benefit which means B can clear the import shipment without paying duty. 

These are some free trade agreements:

SAFTA (South Asian Free Trade Area):Countries involved - India, Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan & Sri Lanka

AIFTA (ASEAN-India Free Trade Area):Countries involved - India, Vietnam, Indonesia, Thailand, Singapore, Philippines, Cambodia, Malaysia, Myanmar, Laos & Brunei Darussalam

CECA (Comprehensive Economic Cooperation Agreement):Countries involved - India & Singapore

CEPA (Comprehensive Economic Partnership Agreement):Countries involved - India & South Korea