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Rules for determining the origin of products eligible
for the preferential tariff concessions pursuant to
Comprehensive Economic Cooperation Agreement between Republic of
India and Republic of Singapore
[Notification No. 59 /2005-Customs
(N.T.) dated 20-07-2005]
Rule 1.Short
Title and Commencement -(1)
These Rules may be called the Customs Tariff Determination of
Origin of Goods under the Comprehensive Economic Cooperation
Agreement between Republic of India and Republic of Singapore
(hereinafter referred to as 'the Agreement'), Rules 2005.][1]
(2) They shall come into force on the 1st
day of August 2005
Rule 2.Definitions
- For the purposes of this Chapter:
(i)
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carrier refers to any vehicle for air, sea,
and land transport;
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(ii)
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CIF price or CIF value refers to the price
actually paid or payable to the exporter for the good when
the good is loaded out of the carrier, at the port of
importation. The price value includes the cost of the good,
insurance and freight necessary to deliver the good to the
named port of destination;
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(iii)
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Customs Valuation Agreement means the WTO
Agreement on Implementation of Article VII of the General
Agreement on Tariffs and Trade 1994;
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(iv)
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FOB price or FOB value refers to the price
actually paid or payable to the exporter for the good when
the good is loaded onto the carrier at the named port of
exportation. The value includes the cost of the good and all
costs necessary to bring the good onto the carrier;
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(v)
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Generally accepted
accounting principles refers to the recognised consensus or
substantial authoritative support in the territory of a
Party at a particular time as to which economic resources
and obligations should be recorded as assets and
liabilities, which changes in assets and liabilities should
be recorded, how the assets and liabilities and changes in
them should be measured, what information should be
disclosed and how it should be disclosed, and which
financial statements should be prepared. These
standards may be broad guidelines of general application as
well as detailed practices, and procedures;
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(vi)
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Harmonised System means the Harmonised
Commodity Description and Coding System
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(vii)
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identical and interchangeable materials
means materials being of the same kind and commercial
quality, possessing the same technical and physical
characteristics, and which once they are incorporated into
the finished product cannot be distinguished from one
another for origin purposes by virtue of any markings etc;
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(viii)
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indirect material means a good used in the
production, testing or inspection of a good but not
physically incorporated into the good, or a good used in the
maintenance of buildings or the operation of equipment
associated with the production of a good, including:
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(a)
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fuel and energy;
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(b)
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tools, dies, and moulds;
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(c)
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parts and materials used in the maintenance of
equipment and buildings;
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(d)
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lubricants, greases, compounding materials, and other
materials used in production or used to operate equipment
and buildings;
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(e)
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gloves, glasses, footwear, clothing, safety equipment,
and supplies;
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(f)
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equipment, devices, and supplies used for testing or
inspecting the goods;
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(g)
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catalysts and solvents; and any other goods that are
not incorporated into the good but whose use in the
production of the good can reasonably be demonstrated to be
part of that production;
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(ix)
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material means ingredients, raw materials,
parts, components, subassemblies and goods that were
physically incorporated into another good or were subject to
a process in the production of another good;
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(x)
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non-originating material used in production
means any material whose country of origin is other than the
Parties (imported non-originating) and any material whose
origin cannot be determined (undetermined origin);
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(xi)
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originating material means a material that
fulfils the criteria set out in either Rule 4 or Rule 5.
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(xii)
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production means methods of obtaining goods
including manufacturing, producing, assembling, processing,
raising, growing, breeding, mining, extracting, harvesting,
fishing, trapping, gathering, collecting, hunting and
capturing.
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Rule 3.Originating
Goods - For purposes of this Agreement, products shall be
deemed originating and eligible for preferential treatment if
they are consigned according to Rule 15 and conform to the
origin requirement under any of the following conditions:
(a) Products wholly produced or obtained
in the territory of the exporting Party, in accordance with Rule
4; or
(b) Products not wholly produced or obtained in
the territory of the exporting Party, provided that the said
products are eligible under Rule 5.
Rule 4. Wholly
Obtained or Produced - For the purposes of
this Agreement, goods wholly obtained or produced in the
territory of a Party shall be treated as originating goods of
that Party. The following goods only shall be considered
as being wholly obtained or produced in a Party:
(a)
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a raw or mineral good [2]
product extracted from its soil, waters, seabed, or
beneath the seabed;
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(b)
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a vegetable good [3]
harvested or produced there;
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(c)
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an animal born and raised there;
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(d)
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a good obtained from animals referred to in (c) above;
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(e)
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a good obtained from hunting, trapping, fishing or
aquaculture conducted there;
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(f)
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a good of sea fishing and other marine goods taken
from outside its territory/territorial waters and Exclusive
Economic Zone (EEZ) by vessels registered with Party and
flying its Flag;
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(g)
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a good processed and/or made on board factory ships
registered with a Party and flying its Flag exclusively from
products referred to in paragraph (f) above;
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(h)
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a good taken by a Party, or a person of a Party, from
the sea bed or beneath the sea bed outside the territorial
waters/sea of that Party, in accordance with the provisions
of the United Nations Convention on the Law of the Sea;
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(i)
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articles collected there which can no longer perform their
original purpose nor are capable of being restored or
repaired and are fit only for disposal or recovery of parts
or raw materials, or for recycling purposes[4]
and
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(j)
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a good produced there exclusively from goods referred
to in (a) through (i), or from their derivatives, at any
stage of production.
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Rule 5. Not
Wholly Obtained or Produced-
1. Within the meaning of paragraph (b) of Rule
3 and subject to the provisions of Rule 7, 10 and that the final
process of manufacturing is performed within the territory of
the exporting Party, products would be considered as originating
if:
(a)(i)
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the total value of the materials, parts or produce
originating from countries other than the Parties or of
undetermined origin used in the manufacture of the product
does not exceed 60% of the FOB value of the product so
produced or obtained; and,
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(ii)
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the product so produced or obtained is classified in a
heading, at the four digit level, of the Harmonised System
different from those in which all the non-originating
materials used in its manufacture are classified; or
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(b)
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the product satisfies the Product Specific Rules as
specified in Annex B.
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2. For the
purposes of calculating the local value added content, either of
the following methods can be applied:
(a) Direct
Method
Value of Originating materials
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+
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Direct Labour Cost
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+
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Direct Overhead Cost
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+
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Profit
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x 100 % ≥ 40%
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FOB Price
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(b) Indirect Method
Value of Non-originating materials [5]
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x 100 % ≤ 60%
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FOB Price
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3. For the purpose of paragraph 2,
if the material does not satisfy the requirements of paragraph
1, the non-qualifying value of the materials shall be that
proportion which cannot be attributed to one or both of the
Parties, provided that the requirements of Rule 7 at each stage
of value accumulation are satisfied.
Rule 6 . Indirect
Materials - In order to determine whether a product originates
in the territory of a Party, any indirect material used to
obtain such products shall be treated as originating whether
such material originates in third countries or not, and its
value shall be the cost registered in the accounting records of
the producer of the good.
Rule 7 . Insufficient
Operations - 1. The following operations or processes shall not
be considered as sufficient transformation provided for in Rule
5:
(a)
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operations to ensure the preservation of products in
good condition during transport and storage (such as drying,
freezing, keeping in brine, ventilation, spreading out,
chilling, placing in salt, sulphur dioxide or other aqueous
solutions, removal of damaged parts, and like operations);
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(b)
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simple operations consisting of removal of dust,
sifting or screening, sorting, classifying, matching
(including the making-up of sets of articles), washing,
painting, cutting;
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(c)
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changes of packing and breaking up and assembly of
consignments;
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(d)
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simple cutting, slicing and repacking or placing
in bottles, flasks, bags, boxes, fixing on cards or boards,
and all other simple packing operations;
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(e)
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affixing of marks, labels or other like distinguishing
signs on products or their packaging;
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(f)
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simple mixing of products whether or not of different
kinds, where one or more components of the mixture do not
meet the conditions laid down in this Chapter to enable them
to be considered as originating products;
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(g)
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simple assembly of parts of products to constitute a
complete product;
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(h)
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disassembly;
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(i)
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slaughter of animals;
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(j)
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mere dilution with water or another substance that
does not materially alter the characteristics of the goods;
and
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(k)
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a combination of two or more operations referred to in
paragraphs (a) to (j).
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Rule 8 . Value
of Non-originating Materials - The value of a non-originating
material used in the production of a good shall be:
(a) For imported materials, parts or
produce, the CIF value at the time of importation determined in
accordance with the Agreement on Customs Valuation; and/or
(b) For materials, parts or produce of
undetermined origin, the earliest price as ascertained by the
certifying authority to have been paid for in the
territory of the Party where the working or
processing takes place.
RULE 9 . Determination
of Origin - No product shall be deemed to be a produce or
manufacture of either Party unless the conditions specified in
these rules are complied with in relation to such products, to
the satisfaction of the authority issuing the certificate of
origin.
RULE 10. Accumulation
- 1. A product manufactured in one Party and
used in the territory of the other Party as a material for the
finished product shall be considered as a product originating in
the territory of the latter Party provided that it:
(a)
complies with the origin requirements provided for in Rule 4 or
5; and
(b)
fulfils the criteria in Rule 7.
2.
The origin of the finished product would be determined under
Rule 5.
RULE 11. Accessories,
Spare Parts and Tools - Each Party shall provide that
accessories, spare parts and tools delivered with a good that
form part of the good"s standard accessories, spare parts and
tools, shall be treated as originating goods if the good is an
originating good, and shall be disregarded in determining
whether all the non-originating materials used in the production
of the good undergo the applicable change in tariff
classification, provided that:
(a) the
accessories, spare parts and tools are not invoiced
separately from the good;
(b) the quantities and value of the
accessories, spare parts and tools are
standard trade practice for the good in the domestic market of
the exporting Party; and
(c) if the good is
subject to a qualifying value content requirement, the value of
the accessories, spare parts, or tools shall be taken into
account as originating or non-originating materials, as the case
may be, in calculating the qualifying value content of the good.
RULE 12 . Treatment
of Packing -
a)
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Packages and packing materials for retail sale:
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i)
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Packages and packing materials for retail sale, when
classified together with the packaged product, according to
General Rule 5(b) of the Harmonised System, shall not be
taken into account for considering whether all
non-originating materials used in the manufacture of a
product fulfil the criterion corresponding to a change of
tariff classification of the said product.
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ii)
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If the product is subject to an ad valorem percentage
criterion, the value of the packages and packing materials
for retail sale shall be taken into account in its origin
assessment, in case they are treated as being one for
customs purposes with the products in question.
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b)
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Containers and packing materials for transport:
The containers and packing materials exclusively used
for the transport of a product shall not be taken into
account for determining the origin of any product, in
accordance with General Rule 5(b) of the Harmonised System.
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RULE 13 . Identical and
Interchangeable Materials -
1.
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Where identical and interchangeable originating and
non-originating materials including materials of undetermined
origin are used in the manufacture of a product, those
materials shall be physically segregated, according to their
origin, during storage.
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2.
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A producer facing considerable costs or material
difficulties in keeping separate stocks of identical and
interchangeable originating and non-originating materials
including materials of undetermined origin used in the
manufacture of a product, may use the so-called "accounting
segregation" method for managing stocks.
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3.
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The accounting method shall be recorded, applied and
maintained in accordance with generally accepted accounting
principles applicable in the Party in which the product is
manufactured. The method chosen must:
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a)
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permit a clear distinction to be made between
originating and non originating materials including materials
of undetermined origin acquired and/or kept in stock; and
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b)
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guarantee that no more products receive originating
status than would be the case if the materials had been
physically segregated.
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4.
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The producer using this facilitation shall only
complete origin declarations for the quantity of products
considered as originating and shall assume full
responsibility for the origin declarations and for keeping
all documentary evidence of origin of the materials. At the
request of the competent authorities of the exporting Party,
the producer shall provide satisfactory information on how
the stocks have been managed.
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5.
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A Party may require that the application of the method
for managing stocks as provided for in this Article is
subject to prior authorisation.
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RULE 14. Advance
Rulings
1.
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Each Party shall provide for the issuance of written
advance rulings, prior to the importation of a good into its
territory, to an importer of the good in its territory or to
an exporter or producer of the good in the exporting party,
as to whether the good qualifies as an originating good. The
importing Party may request, at any time during the course
of evaluating the request for an advance ruling, additional
information necessary to evaluate the request. The importing
party shall issue its determination regarding the origin of
the good within 120 days after receipt of all necessary
information.
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2.
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The importing Party shall apply an advance ruling to
importation into its territory of the good for which the
ruling was issued, for such period, which may be specified
in the ruling.
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3.
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The importing Party may modify or revoke an advance
ruling:
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a)
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if the ruling was based on an error of fact;
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b)
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if there is a change in the material facts or
circumstances on which the ruling was based; or
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c)
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to conform with a modification of this Chapter.
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4.
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Where the importing Party modifies or revokes an advance
ruling, such modification or revocation shall only take
effect 60 days after the date on which the modification or
revocation is issued, and shall not apply to importation of
a good that has occurred prior to the effective date.
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5.
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Notwithstanding paragraphs 3 and 4 above, the importing
Party may revoke any advance ruling ab initio, if the
importer or exporter to whom the advance ruling was issued
had provided false or incorrect information pursuant to the
application for the ruling.
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6.
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Apart from the advance ruling being revoked ab initio,
the person who had provided the false or incorrect
information shall also be liable to appropriate penalties
under the domestic laws of the respective Parties.
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RULE 15 . Consignment
Criteria - The originating goods of the other Party shall be
deemed to meet the consignment criteria when they are:
a)
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transported directly from the territory of the other
Party; or
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b)
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transported through the territory or territories of one
or more non-Parties for the purpose of transit or temporary
storing in warehouses in such territory or territories, and
the products have not entered into trade or consumption
there, provided that
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i)
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they do not undergo operations other than unloading,
reloading or operations to preserve them in good condition;
or
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ii)
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the transit entry is justified for geographical reason
or by considerations related exclusively to transport
requirements.
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RULE 16. Certificate
of Origin - Products eligible for preferential concessions
shall be supported by a Certificate of Origin issued by a
government authority designated by the government of the
exporting Party and notified to the other Party (referred to
herein as "the certifying authority") in accordance with the
Operational Certification Procedures, as set out in Annex A.
RULE 17 . Co-operation
on verification of Certificates of Origin
1. The Parties shall co-operate with each
other to verify the authenticity and the correctness of the
information given in the certificates of origin.
2. For the purpose of implementing the
provisions of paragraph 1, the customs administration of the
importing Party shall return the certificate of origin, or a
copy of the document, to the certifying authority of the
exporting Party, giving the reason for the enquiry. Any document
and/or information obtained suggesting that the information
given on the certificate of origin is incorrect shall be
forwarded in support of the request for verification.
3. The verification shall be carried out by the
certifying authority of the exporting Party.
RULE 18 . Denial of
Preferential Tariff Treatment -
1. Export of consignments accompanied by an authentic
Certificate of Origin will not be subjected to any detention or
delays by the Customs Authorities of the importing country.
2. In case of reasonable doubt about the authenticity of
Certificate of Origin, the Customs authority of the importing
country may seek a clarification from the certifying authority
of the exporting country, which will furnish the same within a
period of 30 days. Meanwhile, the subject consignment will
be allowed entry into the importing country on a provisional
basis against a bond or a guarantee i.e. a legally binding
undertaking as may be required. After examining the
information so provided by the certifying authority, the Customs
Authority in the importing country would take appropriate action
to finalise the provisional assessment.
3. Where the clarification carried on in above paragraph
2 is not conclusive, the importing Party may, upon informing the
exporting Party and with the knowledge of the importer concerned
and with the consent of the exporter or manufacturer concerned,
visit the exporter or manufacturer concerned for the purpose of
verifying the preference claim. If no consent is given by
the exporter or manufacturer concerned within a period of 45
days, the importing party may disallow the tariff preference for
the particular Certificate of Origin.
RULE 19 . Consultation
and Modifications - These rules may be reviewed as and when
necessary upon the request of either Party and may be modified
by mutual agreement pursuant to Article 16.7 of the agreement on
Comprehensive Economic Co-operation Agreement between Republic
of India and Republic of Singapore.
[1]
Substituted by Notification No. 30/2008 Cus (NT.) dated
20.03.2008.
[2]
Includes mineral fuels, lubricants and related materials as
well as mineral or metal ores.
[3]
Includes agricultural and forestry products.
[4]
This would cover all waste and scrap, including waste and scrap
resulting from manufacturing or processing operation or
consumption in the same Party, scrap machinery, discarded
packaging and all products that can no longer perform the
purposes for which they were produced and are fit only for
disposal for the recovery of parts or raw materials. Such
manufacturing or processing operations shall include all types
of processing not only industrial or chemical but also mining,
agriculture, construction, refining, incineration and sewage
treatment operations.
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