The SAFTA notifications
Exemption and a bar: The Notification works like this:- There is an Appendix I and an Appendix – II.
Appendix I is the list of countries which are not LDCs (Least Developed Countries) and this list has Pakistan and Sri Lanka. Appendix II lists out the LDCs, namely Bangladesh, Bhutan, Maldives and Nepal.
There are three Annexures. Annexure I lists 868 tariff headings, Annexure II has 743 headings and Annexure III has 254 relating to textiles. Now these are basically negative lists.
The notification has a table which is a virtual tariff, which allows two rates of duty for import, one for imports from the LDC countries and the other for the NON LDC countries.
Now Annexure I is a negative list for imports from Pakistan and Sri Lanka – that means the rates as per this notification will not be applicable to imports from Pakistan and Sri Lanka for the goods covered by Annexure I.
Similarly, there is a negative list for imports from LDC countries. The concessional rates will not be applicable for imports of items covered by Annexure II, imported from LDC countries.
And there is a common negative list – Goods covered under Annexure III pertaining to textiles are not covered by this notification; there is another notification for that.
NOTIFICATION NO. , Dated: June 30, 2006
Textiles – a positive list:- The 254 textile items, figuring in Annexure III in the above notification which is a negative list there, are made into a positive list in this notification. The items covered will get a concessional duty when imported from the LDC countries or the big brothers!
NOTIFICATION NO. , Dated: June 30, 2006
Cascading effect – controlled: These notifications cast their shadows in other notifications which the government has effectively noticed and controlled by making proper amendments in various notifications making the SAFTA notifications inapplicable in those notifications.
1. As per Notification No. 236/1989-Customs, DATED : September 1, 1989, goods imported from certain countries under the Agreement on the Global System of Trade Preferences among Developing Countries, enjoy a huge concessional rate raging from 15 to 30% of the effective rate. Now this notification is amended to make the SAFTA notifications inapplicable to this notification.
2. NOTIFICATION NO. 105/1999-Customs, DATED : August 10, 1999. This notification provides a concessional rate to imports from these very SAARC countries in accordance with the Customs Tariff (Determination of Origin of Goods under the Agreement on SAARC Preferential Trading Arrangement) Rules, 1995.
3. NOTIFICATION NO. 26/2000-Customs, DATED : March 1, 2000, exempts goods imported from Sri Lanka in accordance with the Customs Tariff (Determination of Origin under the Free Trade Agreement between the Democratic Socialist Republic of Sri Lanka and the Republic of India) Rules, 2000. Those who avail this notification cannot take the benefit of SAFTA notifications for determining the rate of duty.
4. NOTIFICATION NO. 72/2005-Cus., Dated : July 22, 2005 allows exemption to certain goods imported under the Bangkok agreement. Bangladesh and Sri Lanka are included under this notification.
Incidentally while making these amendments, the Government used the opportunity to make some much needed amendments which were to be done long ago.
NOTIFICATION NO. , Dated: June 30, 2006
Rules of Origin notified: the Rules of Determination of Origin of Goods under the Agreement on South Asian Free Trade Area (SAFTA) has been notified.
NOTIFICATION NO. 75/2006-NT-Cus., Dated: June 30, 2006