Generalised System of Preference - How to get one?

Updated on April 02, 2024 06:51:06 PM

A GSP Registration is a legal document that is issued to an exporter of manufactured goods to verify the origin of the product. It includes important information such as the manufacturer's details, the location where the goods were produced, and the intended destination of the commodities. It is a trade agreement offered by developed countries to developing nations.

This document serves as proof to customs authorities and trade partners, ensuring compliance with trade agreements, import regulations, and tariff policies. It plays a vital role in verifying the authenticity and traceability of goods, promoting fair trade practices, and facilitating international trade transactions with transparency and credibility.

GSP Certificate [Sample]

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Rules of Generalised system of preference

The exported goods must meet the rules of origin set by the importing country to benefit from the Generalized System of Preferences (GSP). The Rules of origin are a set of requirements established by the importing country that Indian products must meet in order to be eligible for preferential tariff treatment upon importation into that country.

The three components of the rules of origin are listed as follows:

  • Origin Criteria: The origin criteria determine whether the product can be considered to originate in the country of export (beneficiary country).
  • Transport Conditions: The transport conditions specify the means of transportation from the country of export to the developed country, so that the goods in question may be eligible for preferential tariff treatment upon importation into the consignee's country.
  • Documentary Evidence: Documentary evidence will serve as the substantiation for products to be granted Generalized System of Preferences (GSP) benefits at the border of the importing country.

Countries that extend Generalised system of preference

  • United stated of America
  • European union
  • Japan
  • Belarus
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Documents required for GSP Registration

Here is a list of documents required to obtain GSP for respective free trade agreements:

  • Digital signature certificate
  • Import export Code
  • Mobile No & Email Address
  • Commercial Invoice
  • Purchase bill with respective details
  • Manufacturer exporter declaration
  • Product description
  • Purchase order from importer
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What is the fee for GSP Registration?

The registration fee is ₹3,200, including professional fees. The registration is valid for up to 12 months from the date of issuance. Exporters can apply for a reissue of the GSP Registration once the validity period has expired.

The fee can be breakdown into the following:-

Particulars Fees
Govt Fee ₹736 per invoice
One time creation fee ₹ 500
Professional Fee ₹1700
Total Fee ₹2936
Validity 12 months from the date of issuance

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Procedure for GSP Registration

Step 1: Account creation

To apply for certification, you need to create an account on the DGFT portal using a Digital Signature Certificate (DSC) or any other authorized government portal.

Step 2: Documentation

An applicant must provide valid information and supporting documents with their application to prove the origin of their products.

Step 3: Verification & authorization

The issuing authority will verify and confirm the product's origin by thoroughly inspecting it using a risk management system.

Step 4: Certification

After the verification and inspection, the authorities will issue the GSP Registration to the respective applicants if they are approved. The GSP Registration must be in English only, as per the agreed rules under the agreement. The issued certificate must include all of the required information about the product and the exporting entity.

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Product eligibility under agreement

A product will be considered to have come from a contracting nation and be eligible for preferential treatment if it meets the following criteria:

Wholly Obtained Or Produced Products such as

  1. Live animals
  2. Agri products
  3. Products made of animals
  4. Products made of Marine animals
  5. Products made of natural resources
  6. Product produced in the territory of the country exclusively
  7. Products have undergone sufficient working or production according to the Product Specific Rules

Products with Import content

Products with import content are goods manufactured wholly or partially from materials imported from other countries into India. Products with import content qualify for the benefit of GSP if imported or unknown origin materials are used in manufacturing such products, provided that the manufacturing process has undergone substantial transformation in India.

Note:-Exporters must provide a GSP Registration for their goods in order to confirm their authenticity, in accordance with the agreed trade agreement between the parties concerned.

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Benefits of GSP Registration

Here is a list of documents required to obtain GSP for respective free trade agreements:

  • Tariff Reduction: A GSP Registration is a document that proves the country of origin of a product. It can help exporters qualify for preferential tariff rates or duty exemptions under trade agreements or preference programs. This can reduce the cost of importing goods and make them more competitive in foreign markets.
  • Compliance with Import Regulations: Many countries have their own import regulations, which may include labeling, packaging, or safety standards. A GSP Registration provides the necessary information to demonstrate compliance with these requirements, ensuring smooth customs clearance and avoiding potential trade barriers.
  • Access to Trade Benefits: Some trade agreements or programs may provide additional advantages beyond tariff reduction, such as access to government incentives, subsidies, or quotas. The GSP Registration is a document that proves eligibility for these benefits.
  • Authenticity and Traceability: A GSP Registration is a document that verifies the country where goods were produced. It provides transparency and traceability in supply chains, helping to combat counterfeiting, intellectual property infringements, and unauthorized transshipment.
  • Trade Data Collection and Analysis: GSP help in collecting trade data, which allows authorities to track and analyze trade flows. This data is useful for monitoring market trends, evaluating the effectiveness of trade policies, and developing strategies for economic development.
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FAQs on GSP

How much time does it take to get GSP Registration?

it takes around 3-5 days to get GSP Registration

What is the govt fee for generalised system of preference certificate?

The govt fee for application is ₹736 per invoice and one time registration fee if ₹500.

Is having an IEC certificate is necessary for GSP registration?

import-export code is an essential requirement for al kind of import-export businesses in India.

Who issues the GSP Registration to exporters in India?

The GSP Registration is issued by the DGFT

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