SAFTA License Certificate of Origin for Exporters of India
SAFTA License is a certificate of origin issued by DGFT for importers and exporters of India. SAFTA certificate is added to the commercial invoice to show the country of origin of goods.
SAFTA stands for South Asian Free Trade Area. Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka constitute the member nations of SAFTA.
As SAFTA comes up with many tax benefits for exporters in India.The South Asian Free Trade Agreement (SAFTA) is a significant certification demanded by merchant exporters engaged in international trade within the South Asian region. This agreement aims to promote regional economic cooperation and integration among the member countries.
SAFTA operates on the principle of preferential tariffs, allowing member countries to trade goods and services at reduced or eliminated customs duties, thereby facilitating seamless and cost-effective cross-border trade. By eliminating tariffs and other trade barriers, SAFTA provides various tax benefits for exporters in India. Read to know the importance, requirements, and process of SAFTA registration.
Importance of SAFTA License
- It is mandatory for importers and exporters to add the Certificate of Origin to the commercial invoice to avoid any shipment problems. Certificate of Origin is an instrument which establishes evidence of origin of goods imported into any country.
- These certificates are essential for exporters to prove where their goods come from and therefore stake their claim to whatever benefits goods of Indian origin (Make in India) may be eligible for in the country of exports.
- There are tax exemption benefits also if the exporter has a SAFTA License. Most exporters don’t need to charge GST in their bill or invoice if they have attached the certificate of origin.
- This gives a boost in sales and preference to the exporter holding SAFTA certificate. If the exporter doesn't charge GST on export of goods, then the importer will have to pay a lesser price. The importer will prefer an exporter who charges “Base Price + No Tax”.
Categories of Certificate of Origin
There are two categories of Certificate of Origin:
- Preferential Scheme: Preferential certificates prescribe Rules of Origin which have to be met for exports to be eligible for tariff preference.
- Non-Preferential Scheme: These Certificate of Origins evidence origin of goods and do not bestow any right to preferential tariffs.
Documents Required for SAFTA License
- Organization Digital Signature Certificate (embedded IEC Code)
- Registered Email on DGFT
- Updated IEC License
- DSC software
- Mobile No. & Email address
- Digital Signature Certificate software
- Commercial Invoice
- Purchase Bill that has details of quantity, origin of raw materials, consumables used in product meant for export
- Manufacturer Exporter Declaration on the company’s Letterhead
- Product Description
- Purchase order from importer company
Note: In the case of tea, exporters who are required to submit Certificate of Origin (Non Preferential) are to apply to the Tea Board or any Inspection Agency authorized by the Tea Board along with documents listed above.
Procedure of SAFTA Registration
The SAFTA registration process encompasses the subsequent stages:
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- Account Creation with Organization based DSC (embedded IEC). All the data will be fetched through IEC
- Apply Online for Certificate of Origin
- Fill the form with appropriate details
- Upload the necessary documents
- Issuance of SAFTA Certificate (within 2-3 working days)
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SAFTA Registration Fees
The SAFTA registration fees are listed below:
| # | SAFTA Registration | Fees |
| 1 | Government Fee | 736 |
| 2 | One-time registration fee | 500 |
| 3 | Application Fee | 2000 |
| Total SAFTA Fees | Rs.3,236 Only |
Note: SAFTA Certificate has to be issued for each invoice.
Other Free Trade Agreements
India has enhanced its market access commitments for neighbouring service providers. These commitments provide companies with an opportunity to build market expertise and grow by international expansion. Under Free or Preferential Trade Agreement there are multiple options where certificate of origin can be generated from India for import benefits to importing companies:-
ICPTA - India Chile Preferential Trade Agreement
SAFTA - South Asia Free Trade Agreement
SAPTA - SAARC Preferential Trade Agreement
IKCEPA - India Korea Comprehensive Economic Partnership Agreement
IJCEPA - India Japan Comprehensive Economic Partnership Agreements
AIFTA - ASEAN India Free Trade Agreement
ISFTA - India Sri Lanka Free Trade Agreement
APTA - Asia Pacific Trade Agreement
GSP - Generalized System of Preferences
GSTP - Global System of Trade Preferences
IMCECA - India Malaysia Comprehensive Economic Cooperation Agreement
ISCECA - India Singapore Comprehensive Economic Cooperation Agreement
Who are the authorized agencies in India for issuing the certificate of origin?
The authorized agencies in India for issuing the certificate of origin are listed in Appendix 35 of the Handbook of Procedures Vol-1 under the Foreign Trade Policy.
These are:
| Agreement | Agencies authorized to issue Certificate of Origin |
| Asia Pacific Trade Agreement (APTA) | Export Inspection Council (EIC); Export Development Authorities; Development Commissioners of EPZs and SEZs; FIEO |
| Global System of Trade Preferences (GSTP) | EIC for all products; Tobacco Board, Guntur for tobacco and tobacco products |
| India Afghanistan PTA | EIC |
| India ASEAN Trade in Goods Agreement | EIC |
| India Chile PTA | EIC |
| India JAPAN CEPA | EIC |
| India Mercosur PTA | EIC |
| India Singapore CECA | EIC |
| South Asian Free Trade Agreement (SAFTA) | EIC |
| India South Korea CEPA | EIC |
Conclusion
The Safta certificate helps exporters to get a preferential treatment and avail many benefits such as less or no custom duties on products listed under SAFTA agreement. Safta also works as "Certificate of origin" for products which helps gain trust in export market overseas. Therefore exporters are professionally advised to obtain SAFTA certificate for their business in India.