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Union of India - Section

Section 5 in The Customs Tariff (Determination of Origin of Goods Under the Preferential Trade Agreement Between the Governments of the Republic of India and Malaysia) Rules, 2011

5. Not wholly obtained or produced goods.

(1)For the purposes of clause (b) of rule 3, goods shall be deemed to be originating goods, when,-
(a)such goods satisfy the criteria under the Product Specific Rules provided in Annexure-I of these rules; or,
(b)
(i)all non-originating materials used in the production of the goods have undergone a change in tariff classification in a sub-heading at the six digit level of the Harmonised system; and,
(ii)qualifying value content of the goods is not less than thirty five per cent of the FOB value:
Provided that the final process of manufacturing is performed within the territory of the exporting Party.
(2)For the purposes of this rule, the following are the formulae for calculating the qualifying value content, namely:-
(a)Direct Method:
Originating Material Cost + Direct Labour Cost + Direct overhead Cost + Other Cost + ProfitFOB Price| x 100 % ≥ 35%
(b)Indirect Method:
Value of imported non-originating materials + Value of materials of undetermined originFOB Price| x 100 % ≤ 65%
(3)The value of the non-originating materials shall be,-
(a)the CIF value at the time of importation of the materials, parts or produce; or,
(b)the earliest ascertained price paid for the materials, parts or produce of undetermined origin in the territory of the Party where the working or processing takes place.
(4)The method of calculating the FOB value is as specified in Annexure-II of these rules.
(5)For the purposes of this rule,-
(a)the Parties may adopt either the direct or indirect method of calculating the qualifying value content;
(b)each Party shall adhere to one method;
(c)any change in the method of calculation shall be notified to the other Party at least six months prior to the adoption of the new method; and,
(d)any verification of the content by the importing Party shall be done on the basis of the method used by the exporting Party.