India-UK Comprehensive Economic and Trade Agreement (CETA) Guidelines

Implementation of Self-Certification System

The Central Board of Indirect Taxes and Customs (CBIC) has issued guidelines for a self-certification system under CETA, effective from July 15. This system allows UK exporters or producers to self-certify that their goods meet the rules of origin for preferential customs duty in India.

• Self-Declaration Framework: Replaces the conventional system of certificates issued by designated authorities.
• Authentication Process: Implemented by Customs authorities of both India and the UK.
• Document Retention: Exporters must retain evidentiary documents as declarations can be challenged.
• Option for Certificates: Exporters can still obtain certificates of origin from authorized agencies like the Directorate General of Foreign Trade.

Authentication and Verification Procedures

To prevent misuse while facilitating trade, an authentication framework has been established between India and the UK.

• Submission Process: UK exporters must electronically submit origin declarations to both the Indian importer and a designated CBIC email.
• Unique Reference Number (URN): Generated after CBIC authentication, necessary for claiming FTA benefits.
• Verification by Customs: Customs may verify whether goods meet the agreement’s rules of origin.

Provisions for Goods in Transit

Goods in transit or under Customs control when the agreement takes effect are eligible for preferential treatment if an authenticated origin declaration is provided post-effectivity.

Tariff Liberalisation and Market Access

• UK Tariff Lines: 99% tariff lines liberalized.
• India Tariff Lines: 89.5% tariff lines opened.
• Market Access: India gains improved access to the UK market for exports like textiles and seafood, while the UK accesses India’s market for automobiles and industrial goods.

Implementation and Challenges

Ajay Srivastava highlights that the real test of CETA will be its implementation. Indian exporters must leverage new preferences, meet regulatory standards, and enhance competitiveness. Additionally, the government must address safeguard measures, carbon rules, and non-tariff barriers for meaningful export growth.

• India's Readiness: Processes are in place for implementing agreements from Day 1.
• Potential procedural issues are expected to be minimal according to Sen from EY India.

Key Takeaways

• CBIC has issued implementation norms for CETA.
• Self-certification has replaced origin certificates.
• URN is mandatory for claiming FTA benefits.
• Customs retain the right to verify origin claims.
• Goods in transit and warehoused goods are eligible for benefits.
• The UK has opened 99% of its tariff lines, while India has opened 89.5%.