When you are involved in the export business, you require specific documents and certificates to streamline the process. Some important documents to consider are the Certificate of Origin, DGFT BRC or Director General of Foreign Trade Bank Realization Certificate, and more. Once you get hold of these important certificates, you can ensure success in your export business.
What is the Certificate of Origin?
Certificate of Origin or COO is the certificate used for identifying the nation of manufacturing or production of specific goods. The COO includes several other vital information like the nature of the product, the destination of export, and the nations of export. It also serves to be a crucial tool for ensuring cross-border trade or export -as agreed upon by treaties and trade agreements by different countries.
With the Certificate of Origin, a product can be labeled ‘Made in India’ or ‘Made in China’ or any other nation. Most international trade associations need the COO. It helps in determining whether specific goods are subject to duties or allowed for imports. Before placing orders, it is recommended to reach out to the concerned authorities in your area to ensure classification of products. Through this information, you will be aware of government charges for your cargo upon import.
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Who Issues a Certificate of Origin?
A Certificate of Origin or COO is issued by the Trade Promotion Council of India and Indian Chamber of Commerce. The certificate is issued by the main two bodies and is essential for exporters in the country to ensure that the commodities that are exported are of Indian origin. It also offers proof that the commodity exported is entirely manufactured, obtained, and sourced in India. A number of COOs are generated across the globe to facilitate the process of trade & commerce.
It is expected that the COO is duly signed by the exporter having a permanent indemnity bond on some non-judicial stamp paper of worth INR 10. The stamp paper should be duly notarized as well. You should ensure that the certificate is duly stamped and signed by the Chamber of Commerce or the authority possessing such qualification. A Certificate of Origin is one of the most common certificates or documents utilized for proving the source of goods.
What is the Importance of the Certificate of Origin?
The primary purpose of the Certificate of Origin or COO is clearing customs. When the imported/exported goods are not available with the Certificate of Origin, the Customs Officer responsible for inspecting the commodities will not permit the goods to go through the warehouse. The COO is issued by the Customs Officer to examine the duties that are expected to be paid while checking whether or not the commodities imported/exported are illegal.
Understanding the Types of Certificates of Origin
The Chambers of Commerce is responsible for issuing different types of Certificates of Origin, including:
- Preferential COO: This COO is rewarded towards commodities that are subject to the treatment of preferential tariff with respect to the payment of duties. The duties can be regarded as the reduction of the standard tariff. Otherwise, it could also be regarded as the complete exemption of the entire tariffs. This situation will arise when more than a single nation will reach some trade agreement including such exemptions upon the import or export of goods between the nations.
- Non-preferential COO: This COO entails that the commodities that are exported or imported are not imparted preferential tariff treatment. Moreover, it also states that the due payment of duties should be imposed on the goods that are getting transported.
Some of the schemes under which the country might receive tariff preferences are:
- GSTP or Global System of Trade Preference: The scheme puts forth tariff concessions between developing nations who serve as parties to the given agreement. EIC or Export Inspection Council reserves its sole authority to issue the COO.
- GSP or Generalized System of Preference: The system gets implemented towards supporting developing nations by providing them preference in respective trade tariffs from developed and industrialized nations. It is a non-contractual tool that serves to be unilateral. Moreover, it is based on the non-reciprocity extension of concessions related to tariffs.
- SAPTA or SAARC Preferential Trading Agreement: In this case, tariff extensions extend only to nations in SAARC.
- APTA or Asia-Pacific Trade Agreement: Currently, nations like India, South Korea, China, Bangladesh, and Sri Lanka exchange tariff concession under the Asia-Pacific Trade Agreement. APTA provides liberalization of non-tariff and tariff restrictions for expanding trade in commodities in the ESCAP or Economic & Social Commission for Asia & Pacific region.
- ISLFTA or Indo-Thailand Free Trade Agreement: It is a free trade agreement made between Sri Lanka and India. Under the given agreement, EIC exercises sole authority towards issuing COO.
Obtaining the Certificate of Origin
Based on the country wherein you would like to export the items and whether or not preferential tariffs are applicable, you can reach out to different agencies to obtain the Certificate of Origin or COO. Some essential documents to be submitted are:
- A duplicate packing list for the respective invoice
- Details of the commodity that is being exported -origin, amount, volume
- A dedicated cover letter for issuing the COO
- Fee that remains applicable for every certificate
- Copies of the COO
- A single copy of the invoice with a proper declaration
An exporter is interested in the Certificate of Origin as it helps in confirming the country of origin of the particular product. The COO affirms that the contents in a particular consignment make sure that the items being exported are made, purchased, or processed within the same nation are totally purchased. Every nation should be aware of the genuine origin of the commodity they are accepting. This helps in determining the value of customs duties while knowing whether or not they can ship legally to the desired destination.
It is important to understand important export-import documents including DGFT BRC and COO. It helps in determining the overall success of your import-export business.
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