Page 115 - ELT_1st September 2020_Vol 373_Part 5

2020 ] NOTIFICATIONS N109
Note : Same good may be assigned different originating crite-
ria in different trade agreements.
(vi) General Rule vs Product Specific Rule (PSR) : Many trade
agreements have a single rule for all goods that are produced
using non-originating materials. In some agreements, for
some or all tariff headings there are Product Specific Rules
(PSRs). Depending on the HS classification of the good, it
needs to be seen which criteria has been used to claim origin.
(vii) De minimis : This provision allows that non-originating ma-
terials that do not satisfy an applicable rule may be disre-
garded, provided that the totality of such materials does not
exceed specific percentages in value or weight of the good.
This provision may or may not be there in an agreement and
the percentage also varies from agreement to agreement.
(viii) Cumulation/Accumulation : The concept of “accumula-
tion”/“cumulation” allows countries which are part of a
preferential trade agreement to share production and jointly
comply with the relevant rules of origin provisions, i.e. a
producer of one participating country of a trade agreement is
allowed to use input materials from another participating
country without losing the originating status of that input for
the purpose of the applicable rules of origin. Otherwise said,
the concept of accumulation/cumulation or cumulative rules
of origin allows products of one participating country to be
further processed or added to products in another participat-
ing country of that agreement. The nature and extent of such
cumulation is defined in an agreement and may vary from
agreement to agreement. Cumulation can be bilateral, region-
al, diagonal, etc.
(ix) Indirect/Neutral elements refer to material used in the pro-
duction, testing or inspection of goods but not physically in-
corporated into the goods, or material used in the mainte-
nance of buildings or the operation of equipment associated
with the production of goods. For example, energy and fuel,
plant and equipment, goods which do not enter into the final
composition of the product, etc. Depending upon the trade
agreement, these elements may be treated as originating or
non-originating.
(x) Rule on treatment of packages and packing materials for re-
tail sale : Such rule provides the manner in which such mate-
rial will be treated while calculating qualifying value content
or tariff shift.
(xi) Direct Consignment : Most agreements lay down the condi-
tion that good claiming originating status of a country should
be directly transported from that country to the importing
country. Certain relaxation may be provided in a trade
agreement, subject to presentation of certain documents.

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