SAFTA License - Certificate of Origin for Exporters of India
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SAFTA License for Exporters of India

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SAFTA License Certificate of Origin for Exporters of India

Updated on April 20, 2023 01:00:27 PM

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 and includes multiple countries - Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. Read to know the importance, requirements, and process of SAFTA registration.

Safta License [Sample]

Safta License [Sample]

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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:

  1. Preferential Scheme: Preferential certificates prescribe Rules of Origin which have to be met for exports to be eligible for tariff preference.
  2. 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

  1. Organization Digital Signature Certificate (embedded IEC Code)
  2. Registered Email on DGFT
  3. Updated IEC License
  4. DSC software
  5. Mobile No.
  6. Commercial Invoice
  7. Purchase Bill that has details of quantum/origin of inputs/consumables used in export products
  8. Declaration from Manufacturer (Exporter) in Letterhead
  9. Product Details
  10. Purchase order from importer

documents required for safta license of origin

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

Procedure of SAFTA registration
  1. PDP section process state Account Creation with Organization based DSC (embedded IEC). All the data will be fetched through IEC
  2. PDP section process state Apply Online for Certificate of Origin
  3. PDP section process state Fill the form with appropriate details
  4. PDP section process state Upload the necessary documents
  5. PDP section process state Issuance of SAFTA Certificate (within 2-3 working days)

SAFTA Registration Fees

# SAFTA Registration Cost
1 Government Fee ₹736
2 One-time registration fee ₹500
3 Application Fee ₹2000
Total SAFTA Fees ₹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

Other Free Trade Agreements

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Frequently Asked Questions

How is CEPA/CECA different from FTA?

A Comprehensive Economic Partnership Agreement (CEPA) or Comprehensive Economic Cooperation Agreement (CECA) is different from a traditional (FTA) Free Trade Agreement in two ways.

Firstly, CEPA or CECA are more comprehensive and ambitious than an FTA in terms of coverage of areas and the type of commitments. While a traditional Free Trade Agreement focuses mainly on goods; a CECA/CEPA is more ambitious in terms of a holistic coverage of many areas like services, investment, competition, government procurement, disputes etc.

Secondly, CEPA/CECA looks deeper at the regulatory aspects of trade than a Free Trade Agreement. It is on account of this that it encompasses mutual recognition agreements that cover the regulatory regimes of the partners. An MRA recognises different regulatory regimes of partners on the presumption that they achieve the same objectives.

Why are almost all the countries signing FTA's?

Countries negotiate Free trade Agreements for a number of reasons:

  • By eliminating tariffs and some non-tariff barriers Free trade Agreement partners get easier market access into one another's markets. Countries negotiate FTA's for a number of reasons.
  • Exporters prefer Free trade Agreement's to multilateral trade liberalization because they get preferential treatment over non-Free trade Agreement member country competitors. For Instance in the case of ASEAN, ASEAN has a Free trade Agreement with India but not with Canada. ASEAN's custom duty on leather shoes is 20% but under the Free trade Agreements with India it reduced duties to zero. Now assuming other costs being equal, an Indian exporter, because of this duty preference, will be more competitive than a Canadian exporter of shoes. Secondly, Free trade Agreement's may also protect local exporters from losing out to foreign companies that might receive preferential treatment under other FTAs.
  • Possibility of increased foreign investment from outside the Free trade Agreement. Consider 2 countries A and B having a Free trade Agreement. Country A has a high tariff and large domestic market. The firms based in country C may decide to invest in country A to cater to A's domestic market. However, once A and B sign a Free trade Agreement and B offers a better business environment, C may decide to locate its plant in B to supply its products to A.
  • Such occurrences are not limited to tariffs alone but it is also true in the case of non-tariff measures. Especially when a Mutual Recognition Agreement (MRA) is reached between countries A and B. Some experts are of the view that slow progress in multilateral negotiations due to complexities arising from a large number of countries to reach a consensus on polarizing issues, may have provided the impetus for FTA's.

How is India placed globally in terms of its bilateral FTAs/PTAs/ CEPAs/CECAs

India has preferential access, economic cooperation and Free Trade Agreements (FTA) with about 54 individual countries. India has signed bilateral trade deals in the form of Comprehensive Economic Cooperation Agreement (CECA) / Comprehensive Economic Partnership Agreement (CEPA) / Free Trade Agreement / Preferential Trade Agreements (PTAs) with some 18 countries. India is a late & cautious, starter in concluding comprehensive PTA covering substantially all trade with some of its trading partners.

What are (ROO) Rules of Origin ?

Country of origin / Rules of origin (ROO) are the criteria needed to determine a product for purposes of international trade. Their significance is derived from the fact that duties & restrictions in several cases depend upon the source of imports.
Rules of origin are used:

  • to implement measures and instruments of commercial policy such as antidumping duties and safeguard measures;
  • to determine whether imported products shall receive most-favored-nation (MFN) treatment or preferential treatment;
  • for the purpose of trade statistics;
  • for the application of labeling and marking requirements; and
  • for government procurement.

What are some of the criteria used in the (RoO) rules of origin?

The criteria in the (RoO) rules of origin sets out specific & detailed conditions on the level of processing that an imported item from a non Free Trade Agreement partner country must undergo in the Free Trade Agreement partner country (or other eligible countries in the region) before being eligible to be called an originating product of a Free Trade Agreement partner country. Some of the common standards used are :-

  • change in tariff class (this could be at the tariff chapter, tariff heading or tariff sub heading level)
  • regional value addition
  • substantial processing or manufacturing by excluding some minimal operations.

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 Mercosur PTA EIC
India Singapore CECA EIC
India South Korea CEPA EIC
South Asian Free Trade Agreement (SAFTA) EIC

What are the four methods of supply under trade in services?

The four methods of supply –

Method 1: Cross border supply (supply from the territory of a Party into the territory of the other Party). For Instance an architect can send his architectural plan through electronic means; a lecturer can send teaching material to students in any other country; a doctor sitting in France can advise his patient in India through digital means. In all these cases, trade in services takes place and this is equal to cross-border movement of goods.

Method 2: Consumption abroad ( consumption in the territory of a Party by the service consumer of the other Party). For Instance a tourist using hotel or restaurant services abroad; a ship or aircraft undergoing repair or maintenance services abroad.

Method 3: Commercial presence (by a service supplier of a Party, through commercial presence in the territory of the other Party). In this case, the service supplier establishes a legal presence in the form of a representative / branch office / joint venture / subsidiary in the host country & starts supplying services. For Instance a bank opens its branch in another country.

Method 4: Presence/movement of natural persons (by a service supplier of a Party, through presence of natural persons of a Party in the territory of the other Party). For Instance Independent service suppliers (e.g. doctors, engineers, individual consultants, accountants, etc.) who provide services in another country. However, GATS covers only temporary movement & not citizenship, residence or employment on a permanent basis in the foreign country.

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