Section 12 in The Customs Tariff (Determination of Origin of Goods under the Preferential Trade Agreement between the Governments of the Republic of India and the Republic of Korea) Rules, 2009
12. Fungible materials.
(1)Where identical and interchangeable originating and non-originating materials are used in the manufacture of a product, those materials shall be physically segregated, according to their origin, during storage:Provided that where the producer is facing considerable costs or material difficulties in keeping separate stocks of identical and interchangeable originating and non-originating materials used in the manufacture of a product, the "accounting segregation" method may be applied:Provided further the accounting method shall be recorded, applied and maintained in accordance with generally accepted accounting principles applicable in the territory of the State party in which the product is manufactured and such method chosen shall,-(a)permit a clear distinction to be made between originating and non-originating materials acquired whether kept in stock or not; and,(b)guarantee that no more products receive originating status then would be the case if the materials had been physically segregated.Explanation:- For the purposes of this rule,-(a)"fungible materials" means materials being of the same kind and commercial quality, possessing the same technical and physical characteristics, and which once they are incorporated into the finished product cannot be distinguished from one another for origin purposes; and,(b)"generally accepted accounting principles" means recognised consensus or substantial authoritative support given 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 and may encompass broad guidelines for general application, as well as detailed standards, practices, and procedures.
