2. Each Party shall ensure that the non-tariff measures under paragraph 1 are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to trade in goods between the Parties.
Article 2.17
State Trading Enterprises
Nothing in this Agreement shall be construed to prevent a Party from maintaining or establishing a state trading enterprise in accordance with Article
XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the General Agreement on the Tariffs and Trade 1994.
Article 2.18 Revision Clause
1. Upon request of a Party, the Parties shall consult to consider accelerating, or broadening the scope of the elimination of customs duties as set out in Annex 2A (Schedule of Specific Tariff Commitments of India) and Annex 2B (Schedule of Specific Tariff Commitments of Oman). Further commitments between the Parties to accelerate the elimination of a customs duty on a good, or to include a good in Annex 2A (Schedule of Specific Tariff Commitments of India) and Annex 2B (Schedule of Specific Tariff Commitments of Oman), shall supersede any duty rate or staging category determined pursuant to their respective Schedules of Tariff Commitments. These commitments shall enter into force on the date specified by the Parties following the exchange of notifications certifying that they have completed their internal legal procedures.
2. Nothing in this Agreement shall prohibit a Party from unilaterally accelerating or broadening the scope of the elimination of customs duties set out in its Schedule of Tariff Commitments in Annex 2A (Schedule of Specific Tariff Commitments of India) or Annex 2B (Schedule of Specific Tariff Commitments of Oman). Any such unilateral acceleration or broadening of the scope of the elimination of customs duties will neither permanently supersede any duty rate or staging category determined pursuant to their respective Schedule nor will serve to waive that Party's right to impose at a later time the duty rate or staging category that is determined for that later time by their respective Schedule.
3. For greater certainty with respect to paragraph 2, a Party may:
(a) raise a customs duty back to the level established in its respective Schedule of Tariff Commitments in Annex 2A (Schedule of Specific Tariff Commitments of India) or Annex 2B (Schedule of Specific Tariff Commitments of Oman) following a unilateral reduction; or
(b) maintain or increase a customs duty as authorised by the Dispute Settlement Body of the WTO.
Article 2.19 Exchange of Data'ยท
1. The Parties recognise the value of trade data in accurately analysing the implementation of this Agreement. The Parties shall cooperate with a view to conducting periodic exchanges of data relating to trade in goods between the Parties.
2. The Parties may engage in such periodic exchanges within the CTG for such purposes and for any other purposes in furtherance of the obligations described in this Chapter as the CTG may determine.
3. A Party shall give positive consideration to a request from the other Party for technical assistance for the purposes of the exchange of data under paragraph 1.
Article 2.20 Committee on Trade in Goods
1. The Parties hereby establish CTG under the Joint Committee.
2. The functions of the CTG shall include:
(a) the monitoring and review of measures taken and implementation of commitments under this Chapter;
(b) the exchange of information and review of developments;
(c) the preparation of technical amendments, including HS Code updating, and otherwise assisting the Joint Committee;
(d) any other matter referred to it by the Joint Committee; and
(e) the preparation of recommendations and reports to the Joint Committee, as necessary.
3. The CTG shall establish such subcommittees as may be necessary under this Agreement, including on Customs Procedures and Trade Facilitation, Technical Barriers to Trade, Sanitary and Phytosanitary Measures, Rules of Origin and Trade Remedies. All such subcommittees shall report to the CTG.
4. Each Party has the right to be represented in the CTG. The CTG shall act by consensus.
5. The CTG shall meet annually or more frequently as the Parties agree otherwise. The meetings of the CTG shall be chaired jointly by Oman and India.
6. The Parties shall examine any difficulties that might arise in their trade in goods and shall endeavour to seek appropriate solutions through dialogue and consultations.
Chapter 3. RULES OF ORIGIN
Article 3.1 Definitions
For the purposes of this Chapter:
"aquaculture" including mariculture, means the farming of aquatic organisms including fish, molluscs, crustaceans, other aquatic invertebrates, and aquatic plants, from seed stock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production, such as, regular stocking, feeding, protection from predators;
"carrier" means any vehicle for air, sea, or land transport. However, the carriage of product can be made through multimodal transport;
"CIF value" means the price actually paid or payable to the exporter for a product when the product is loaded out of the carrier, at the port of importation, including the cost of the product, insurance, and freight necessary to deliver the product to the named port of destination. The valuation shall be made in accordance with Article VII of the GATT 1994 and the Customs Valuation Agreement;
"competent authority" refers to:
(a) for exports from India, the Department of Commerce or any other agency notified from time to time; and for imports into India, the Central Board of Indirect Taxes and Customs (CBIC) or any other agency notified from time to time; and
(b) for Oman, Ministry of Commerce, Industry and Investment Promotion; and Directorate General of Customs, Royal Oman Police or any other authority notified from time to time;
"Customs Administration" refers to:
(a) for India, the CBIC or its successor of such customs administration; and
(b) for Oman, Directorate General of Customs, Royal Oman Police or its successor of such customs administration;
"customs value" means the value of a product as determined in accordance with Article VII of the GATT 1994, including its notes and supplementary provisions thereof, and the Customs Valuation Agreement;
"Ex Works price" means the price paid for the product ex-works to the producer in the Party where the last working or processing is carried out, provided the price includes the value of all the materials used;
"Free-On-Board (FOB) value" means the price actually paid or payable to the exporter for a product when loaded onto the carrier at the named port of exportation, including the cost of the product, and all costs necessary to bring the product onto the carrier;
"Fungible products or materials" means products or materials that are interchangeable for commercial purposes and whose properties are essentially identical;
"generally accepted accounting principles (GAAP)" means the recognised consensus of substantial authoritative support in the territory of a Party, with respect to the recording of revenues, expenses, costs, assets, and liabilities, the disclosure of information and the preparation of financial statements. These principles may encompass broad guidelines of general application as well as detailed standards, practices, and procedures;
"indirect material" means a material used in the production, testing, or inspection of a product, or a material used in the maintenance of buildings, or the operation of equipment associated with the production of a product but not physically incorporated into the product, including:
(a) fuel and energy;
(b) tools, dies and moulds;
(c) spare parts and materials used in maintenance of equipment and buildings;
(d) lubricants, greases, and compounding materials used in production or used to operate equipment and buildings;
(e) gloves, glasses, footwear, clothing, safety equipment and supplies;
(f) equipment, devices, and supplies used for testing or inspecting of products;
(g) catalysts and solvents; and
(h) any other material that is not incorporated into the product but for which the use in the production of the products can be reasonabiy demonstrated to be a part of that production;
"issuing authority" refers to the government authority(ies) or agency(ies) identified and designated by the competent authority of each Party for issuance of the certificate of origin, notified before the entry into force of the Agreement and as amended from time to time;
"juridical person" means any legal entity duly constituted or otherwise organised under the applicable laws and regulations, whether for profit or otherwise, and whether privately-owned or government-owned, including any corporation, trust, partnership, joint venture, sole proprietorship, or association;
"manufacture" refers to any kind of working or processing, or specific operations;
"material''. means any ingredient, raw input, component or part that is used in the production of a product or physically incorporated into it;
"non-originating material" means any materials whose country of origin is a country other than the Parties (imported non-originating), any materials whose origin cannot be determined (undetermined origin) or a material that does not qualify as originating in accordance with this Chapter;
"originating material" means materials that qualify as originating in accordance with this Chapter;
"preferential tariff treatment" means the customs duty rate applicable to an originating product, pursuant to each Party's Schedule in Annex 2A (Schedule ,of Specific Tariff Commitments of India) and Annex 2B (Schedule of Specific Tariff Commitments of Oman);
"producer" means a person who engages in the production of a product;
"product" means that which is obtained by growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting, extracting or manufacturing, even if it is intended for later use in another manufacturing operation;
"production" refers to growing, cultivating, raising, mining, harvesting, picking, breeding, extracting, gathering, collecting, fishing, farming, aquaculture, trapping, hunting, capturing, manufacturing and processing, assembling a product or any combination thereof;
"tariff classification" means the classification of a product according to the HS, including its General Interpretative Rules and Explanatory Notes thereof;
"territorial sea" means waters extending up to 12 nautical miles from the baseline as defined by the Parties, in accordance with the United Nations Convention on the Law of the Sea, 1982; and
"value of non-originating materials" means the customs value at the time of importation of the non-originating materials used, i.e., the CIF value or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the territory of a Party.
Article 3.2 Application and Interpretation
1. For the purposes of this Chapter:
(a). the basis for tariff classification is the HS; and
(b) any cost and value referred to in this Chapter,
shall be recorded and maintained in accordance with the GAAP applicable in the territory of the Party in which the product is produced.
Article 3.3 Origin Criteria
1. For the purposes of this Agreement, a product shall be deemed as originating in a Party and shall be eligible for preferential treatment provided it:
(a) is wholly obtained or produced in the territory of the Party as per Article 3.4 (Wholly Obtained or Produced Product); or
(b) has undergone sufficient working or production as per the Product Specific Rules (PSR) in Annex 38 (Product Specific Rules).
2. The producer has the option to use either of the following two methods of computing the value addition criteria of a product in the PSR in Annex 38 (Product Specific Rules):
(a) Build-down Method
(FOB value or Ex Works price) - (Value of Non Originating Materials)
VA= X 100
FOB value or Ex Works Price
(b) Build-up Method
Value of Originating Material + direct labour cost+ direct overhead cost
VA= X 100
FOB value or Ex Works Price
"VA" means the value addition in a product, expressed as a percentage.
3. In case of build-down method, the value of the non-originating materials shall be:
(a) the CIF value at the time of importation of the materials; or
(b) the earliest ascertained price paid for the materials of undetermined origin in the territory of the Party where the working or processing takes place.
4. In case of build-up method:
(a) value of originating material shall consist of:
(i) cost of materials;
(ii) freight and insurance.
(b) direct labour cost shall include:
(i) wages;
(ii) remuneration;
(iii) other employee benefits associated with the manufacturing process.
(c) direct overhead cost shall include, but not limited to:
(i) real property items associated with the production process (insurance, factory rent and leasing, depreciation on buildings, repair and maintenance, taxes, and interests on mortgage);
(ii) leasing of and interest payments for plant and equipment;
(iii) factory security;
(iv) insurance (plant, equipment and materials used in the manufacture of the products);
(v) utilities (energy, electricity, water and other utilities directly attributable to the production of the product);
(vi) research, development, design and engineering;
(vii) dies, moulds, tooling and the depreciation, maintenance and repair of plant and equipment;
(viii) royalties or licenses (in connection with patented machines or processes used in the manufacture of the product or the right to manufacture the product);
(ix) inspection and testing of materials and the products;
(x) storage and handling in the factory;
(xi) disposal of recyclable wastes;
(xii) cost elements in computing the value of raw materials, i.e., port and clearance charges and import duties paid for the dutiable component.
5. Notwithstanding paragraph 1, the final manufacture before export must have occurred in the exporting Party.
Article 3.4
Wholly Obtained or Produced Product
1. For the purposes of this Chapter, the following products shall be considered as being wholly obtained or produced in the territory of a Party:
(a) plant and plant products, including fruits, flowers, vegetables, trees, seaweed, fungi, algae and live plants, grown, cultivated, harvested, picked or gathered there;
(b) live animals born and raised there;
(c) products obtained from live animals born or raised there;
(d) mineral products and natural resources extracted or taken from that Party's soil, waters, seabed or subsoil beneath the seabed;
(e) product obtained from hunting, trapping, fishing or aquaculture, gathering, or capturing conducted there;
(f) product of sea fishing and other marine products taken from outside its territorial sea by a vessel or produced by a factory ship registered, recorded or licensed with a Party and flying its flag;
(g) product, other than products of sea fishing and other marine products, taken or extracted from the seabed or the subsoil of the continental shelf or the exclusive economic zone of any of the Parties;
(h) waste or scrap (excluding precious metals) resulting from consumption or manufacturing operations conducted in the territory of that Party, fit only for disposal or recovery of raw materials; and
(i) product produced in the territory of that Party exclusively from product referred to in subparagraphs (a) through (h).
Article 3.5 De Minimis
1. Notwithstanding paragraph 1 of Article 3.3 (Origin Criteria), non-originating materials that do not meet the required change in tariff classification (CTC), if applicable in the product specific rule (PSR), shall be deemed originating if:
(a) their total value does not exceed 10% of the FOB value or Ex Works price of the exported product; or
(b) in the case of textiles and clothing under chapters 50-63 of the HS, the weight of the non-originating material is less than 10% of the total weight of the materials used in the production of the exported product or 10% of the FOB value or Ex Works price.
2. In the case of a wholly obtained product, a de minimis value not exceeding 10% of the FOB value or Ex Works price of the exported product is allowed.
3. For the purpose of paragraph 1, the de minimis availed under this Article shall be included in the determination of the value of non-originating materials for arriving at the applicable VA as set out in Annex 38 (Product Specific Rules).
Article 3.6
Minimal or Insufficient Operations and Processes
1. Notwithstanding any provisions in this Chapter, a product shall not be considered originating in a Party merely by undergoing any one or more of the following operations on non-originating materials in the territory of that Party:
(a) operations to ensure the preservation of products in good condition during transport, and storage (such as drying, freezing or thawing, keeping in brine, removal of damaged parts) and other similar operations;
(b) changes of packaging and breaking up and assembly of packages;
(c) washing, cleaning, and removal of dust, oxide, oil, paint or other coverings;
(d) simple1 combining operations, labelling, pressing, cleaning or dry cleaning, packaging operations, or any combination thereof;
(e) cutting to length or width and hemming, or stitching or over locking of fabrics which are readily identifiable as being intended for a particular commercial use;
(f) for textiles: trimming or joining together by sewing looping, linking or attaching accessory articles such as straps, bands, beads, cords, rings and eyelets; ironing or pressing;
(g) simple painting and polishing;
(h) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(i) operations to colour sugar or form sugar lumps;
U) peeling and removal of stones and shells from fruits, nuts and vegetables;
(k) unflaking, crushing, squeezing, slicing, macerating and removal of bones;
(I) sharpening, simple grinding or simple cutting and repackaging;
(m) simple operations such as removal of dust, sifting, screening, sorting, classifying, grading, matching, slitting, bending, coiling or uncoiling;
(n) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(o) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
(p) simple mixing of products, whether or not of different kinds;
(q) mere dilution with water or another substance that does not materially alter the characteristics of the product;
1 For the purposes of this Article, "simple" describes an activity which needs neither special skills nor machines, apparatus or equipment especially produced or installed to carry out the activity.
(r) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;