SAFTA License

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SAFTA License

Overview

The SAFTA Certificate is important for both importers and exporters as it not only helps them in trade but also gives preferential treatment and several other benefits like reduction or no customs duties on products listed under the SAFTA agreement at all. Therefore, acquiring a SAFTA RCMC Certificate is not just necessary but also important for businesses looking forward to expanding their business and market reach in the South Asian region. Under the right guidance with experienced experts like Bizfoc, one can easily secure a SAFTA license smoothly and efficiently. Contact us today and get your certificate as early as you can!

What is a SAFTA Certificate?
The SAFTA certificate is a certificate of origin issued by DGFT for importers and exporters of India. This certificate could add a commercial invoice to show the country of origin of goods.

A SAFTA Agreement is a regional free trade agreement among South Asian Association for Regional Corporation (SAARC) countries, it includes members of eight major countries including India. The SAARC's members are the Islamic Republic of Pakistan, the People's Republic of Bangladesh, the Democratic Socialist Republic of Sri Lanka, the Kingdom of Bhutan, the Republic of the Maldives, the Kingdom of Nepal, and the Republic of India.

Under the terms mentioned in the SAFTA agreement, the countries agreed on reducing or eliminating tariffs on goods and services, fascinating and cost-effective cross-border trade. Additionally, SAFTA contains provisions for origin guidelines, dispute resolution procedures, and safeguard measures. To supervise its execution and handle any potential problems, the agreement also calls for the formation of an expert committee.

SAFTA is an abbreviation used for the South Asian Free Trade Area, was signed in 2004 and came into force on January 1st, 2006, categorizing India and Pakistan as Nor-Least Developed Contracting (NLDC) States and Bangladesh, Maldives, Bhutan, and Nepal categorized as Least Developed Contracting (LDC) States.

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Benefits/ Importance

The SAFTA (South Asian Free Trade Area) Certificate offers various key benefits, which are mentioned below:

Aids in preventing shipment issues.
Boosts foreign investment among members of countries in SAARC.
Elevate the company's reputation and credibility.
For items of Indian origin to be eligible for incentives in the country of export, exporters must assert their claim.
Access to a broader market within South Asia.
By reducing tariffs and trade barriers, it has improved integrity and transparency among countries for the benefit of South Asian people.
Importance

Acquiring a SAFTA Certificate of Origin is important due to several reasons discussed here:

The Certificate of Origin needs to be attached by importers and exporters to the commercial invoice. A SAFTA Certificate is a legally binding document that verifies the origin of products being imported into the countries that are importing them.
The exporter can apply for tax exemptions if they have a SAFTA license. A business is often excluded from charging GST if an exporter includes a certificate of origin or SAFTA Certificate Online with their bill or invoice.
The SAFTA Certificate is required for exporters to be eligible for any benefits granted to items of Indian origin (made in India) in the country of exportation.
An exporter with SAFTA certification benefits from increased sales as well as market preference. If the exporter does not include GST in the selling price of the exported products, the importer from another country will save money. International importers will give preference to an exporter with "Base Price + No Tax" terms.

Documents Required

For the smooth acquisition of the SAFTA Certificate, Indian exporters must gather the following documents:

Import-Export Code (IEC) Certificate
Certificate of registration of company or organization
Details of each director, partner, or proprietor
Exporter details
Commercial Invoice
Bill detailing the quantity or country of origin of materials or consumables used in export goods
Declaration from the manufacturer on the letterhead
Product details
Details of Raw materials
Description of goods
Purchase order from the importer
Digital signature of Organization
DSC Software
Cost statements
CUSDECS and Imports Invoice for confirming imported raw materials

Apply for SAFTA

The following steps are included in the SAFTA certificate registration process:

Step 1: Acquiring an IEC Code

Getting the IEC Code is the first step towards the SAFTA Registration process. Setting an account using organization-based DSC (integrated IEC). All import and export operations in India require the IEC code, a 10-digit PAN-based code. Via IEC, all of the data will be retrieved.

Step 2: Eligibility for Applying

Verify whether the exported items are eligible for preferential treatment under the terms of the SAFTA agreement. The requirements that must be fulfilled, which differ based on the kind of product, for items to be deemed to originate from a SAFTA member country are outlined in the SAFTA agreement.

Step 3: Submission of Application Form

The exporters should fill in the necessary details and complete the form to obtain a certificate of origin authorized under the SAFTA trade agreement.

Step 4: Document Verification

Once the exporter successfully uploads the documents, the organization verifies them and grants the SAFTA Certificate after approval.

Step 5: Submitting Fees

Make the payment of the required fees after applying.

Step 6: Granting License

SAFTA Certificate may arrive within 2 to 3 working days after issuance.

Types of SAFTA Certificate

There are mainly two main categories of SAFTA Certificate or Certificate of Origin, both of which are mentioned below -

Preferential Scheme:   Exporters must get a SAFTA Certificate Online relevant to the preferential scheme and adhere to the Rules of Origin specified in their preferential certificates to secure a tariff exemption for goods shipped.

Non-Preferential Scheme:   Non-Preferential Certificates of Origin do not grant the holder a reduction in tariffs; rather, they are used to demonstrate the place of manufacture.

Prerequisite SAFTA for Export

The below-listed requirements are needed before the submission of the application for the SAFTA Certificate. So one must acquire them on priority:

IEC Code Registration
Registered office details like the company’s name, partner’s name, directors, managing directors or proprietors, email ID, mobile number, and address.
Details about each branch or unit, including its address and GST number.
DSC of directors
Details of trade agreement, issuing agency, regional office, and issuing office
Invoice number

Validity

The SAFTA Certificate of Origin typically has the following validity rules:

1.   Per Consignment: Most commonly, a SAFTA certificate is valid for a single shipment/consignment of goods. This means each new shipment usually requires a new certificate.

2.   Time Validity: If stated, it is generally valid for 12 months from the date of issuance, but in practice, customs authorities in the importing SAFTA country usually expect the certificate to be recent and aligned with the shipment date.

3.   Expiration: After the validity period, the certificate cannot be used to claim preferential tariff treatment under SAFTA.

FAQ

  • Who needs a SAFTA Certificate?

    Any exporter shipping goods to a SAFTA member country who wants to avail reduced or zero customs duty. The importer often requests it to get tariff concessions.

  • What are the Rules of Origin?

    Goods must be: Wholly obtained in the exporting country, or Substantially produced/processed there (usually via value addition or change of tariff heading). Only such goods qualify for preferential tariffs under SAFTA.

  • Can all goods get a SAFTA Certificate?

    Only goods that meet the SAFTA Rules of Origin and are eligible under SAFTA schedules for tariff concessions can get the preferential certificate.

  • Is it mandatory to have a SAFTA Certificate?

    No, it’s not mandatory. But without it, importers cannot claim tariff benefits, which can make your products more expensive compared to competitors.

  • Can the SAFTA Certificate be used for multiple shipments?

    No, usually per shipment. Each new consignment typically requires a new certificate.