An electronic certificate of origin of exports can be easily verified from anywhere in the world and prevents misuse of import duty exemptions.
The Cochin Chamber of Commerce & Industry has leapt ahead of its contemporaries by initiating an Aadhaar-based e-certificate of origin of exports, the first of its kind in India.
A certificate of origin is issued to exporters by the Chamber of Commerce to avail duty benefits under Free Trade Agreements and to prove the place of origin.
The user-friendly electronic certificate, which is in its pilot run now, will enable the Cochin Chamber to manage digital requests and sign electronic certificates of origin for exporters and freight forwarders.
The president of the chamber, C.S. Kartha, told THE WEEK that this initiative was prompted by the rise in the number of fake certificates of origin. He explained that fake certificates with the chamber's seal and logo had been detected.
“The chamber gives certificates only to members, who are added after scrutiny. But, fake certificates allow non-members to export. The legality of their operations is not monitored. This will not be possible with electronic certificates,” he said.
The electronic certificates will be issued digitally to a secure vault created specifically to store certified documents. The vault is managed by Myeasydocs, the company implementing the project. This Chennai-based firm was incubated by IIT Madras. The company's clientele includes the Saudi Arabian embassy and Singapore's ministry of manpower.
The CEO of Myeasydocs, Avira Tharakan, said the safety of the digital vault was being ensured by the “best in the field” such as Microsoft and Azure.
“The verification of export of origin is a major problem for importers and customs houses globally. Fake 'Made in India' tags are used to get duty exemptions reserved for India. This can be stopped by using the electronic system as the certificate can be verified instantly,” he explained.
Exporters agree that the facility is convenient. But most of them are waiting to see if there is a difference in cost along with the convenience. An official of Harrisons Malayalam Ltd, one of the largest exporters of tea in India, said that though charges had been retained at Rs 100 during the pilot period, the eventual cost was yet to be specified.
When posed this query, Tharakan said: “The charges would be based on volumes and usage during the pilot. There would be at least 70 per cent savings for exporters by moving documents electronically as compared to using expensive courier.”
“Currently courier to foreign countries costs about $30 to $50 and delivery may take a week,” he said.
This new process comes as a blessing to exporters as it makes it easy to do business, and reduces export transaction costs and the time taken to avail export benefits.