Circular No.: ES/386/2020-21 12th December, 2020
To: Members of the Council
Sub: Third Party Invoicing in case of Preferential Certificates of Origin issued in terms of DFTP for "wholly obtained goods"
CBIC has issued Circular No. 53/2020- Customs dated 8th December, 2020 regarding issuance of third-party invoicing in case of preferential certificates of origin issued in terms of DFTP for wholly obtained goods.
The Board has received representations from trade with regard to use of third party invoicing while claiming preferential tariff treatment in terms of Duty Free Tariff Preference Scheme (DFTP) for Least Developed Countries (DFTP) in respect of “wholly obtained goods”. Certificates of Origin (CoOs) issued in terms of Customs Notification No. 29/2015-Cus (N.T) dated 10.03.2015 and with third party invoicing were earlier being accepted by the proper officer but that same has been discontinued after implementation of CAROTAR, 2020.
Now, the matter has been examined by the Board.
The commercial invoice for goods originating in the LDC is issued in the third country and not by the consignor in the exporting country. In some other notified preferential rules of origin, where specific provision for third party invoicing is provided, the origin of the goods is nonetheless based upon the value addition done in the country of origin alone, with Free on Board (FoB) in country of origin being the base for arriving at the local value content.
The Board is of the view that where value of goods does not have impact on the originating status, i.e ‘wholly obtained’, CoO issued in terms of DFTP Scheme for LDC with third party commercial invoice may be accepted. The goods shall satisfy the applicable rules of origin and due diligence shall be done.
Members may kindly make a note of the above.