Govt replaces 'certificate' with 'proof' in Rules of Origin regulations
Mar 21, 2025
The Central Board of Indirect Taxes and Customs (CBIC) has amended the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020, replacing the term "certificate" with "proof" in multiple provisions.
The amendment, effective from March 18, modifies key rules governing the determination of the country of origin of imported goods — a crucial factor in availing duty benefits under free trade agreements (FTAs).
According to experts, the move aims to tighten scrutiny on imports, particularly those from China that are routed through the Association of Southeast Asian Nations (ASEAN), Sri Lanka and the United Arab Emirates (UAE) to evade higher tariffs and trade restrictions.
"By shifting to a broader 'proof of origin' requirement, Indian customs authorities now have greater flexibility to demand additional evidence beyond just a certificate, ensuring that importers cannot misuse FTAs to bypass trade barriers meant to protect domestic industries," said Sivakumar Ramjee, executive director – indirect tax, Nangia Andersen LLP.
According to Ramjee, investigations revealed that Chinese goods such as mobile phones, white goods, set-top boxes and other electronic devices were being diverted to India through countries like Vietnam, Singapore and Indonesia. These products were falsely claimed under FTAs to avail concessional duty benefits, despite failing to meet the prescribed "rules of origin" criteria.
"A company based in Ho Chi Minh City, Vietnam, was discovered importing finished silk from China, falsely rebranding it as 'Made in Vietnam,' and exporting it to India. This deceptive practice took advantage of Vietnam's trade agreements with India to secure lower tariffs, compromising the legitimacy of the certificate of origin," Ramjee said.
In response to such practices, Indian authorities have intensified scrutiny of imports to verify the true origin of goods listed in their certificates of origin, aiming to safeguard domestic industries from unfair competition, Ramjee added.
[The Business Standard]
