In a significant development aimed at facilitating bilateral trade and strengthening the framework for preferential customs duty treatment, the Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance, Department of Revenue, has notified the Customs Tariff (Determination of Origin of Goods under the Free Trade Agreement between India and New Zealand) Rules, 2026.
The rules have been notified vide Notification No. 82/2026-Customs (N.T.) dated October 12, 2026, issued through G.S.R. 878(E), in exercise of powers conferred under Section 5(1) of the Customs Tariff Act, 1975.
The new framework, which will come into force on October 20, 2026, prescribes comprehensive criteria for determining the origin of goods, certification requirements, preferential tariff claims, verification procedures, record-keeping obligations and safeguards against misuse of preferential tariff benefits under the Free Trade Agreement signed between India and New Zealand on April 27, 2026.
New Rules Establish Framework for Preferential Customs Duty Benefits
The newly notified Rules of Origin establish the legal mechanism for determining whether goods traded between India and New Zealand qualify as originating goods and are consequently eligible for preferential customs duty treatment under the bilateral Free Trade Agreement.
Under Rule 3, goods will qualify as originating if they are wholly obtained or produced in the territory of India or New Zealand, or satisfy the applicable Product Specific Rules prescribed under Annexure-A, together with all other applicable origin requirements.
The rules cover agricultural products, minerals, industrial goods, manufactured products and other commodities, subject to the respective product-specific origin conditions.
Importantly, preferential customs duty benefits will not be available merely because goods are shipped from India or New Zealand. The goods must independently satisfy the prescribed origin requirements.
Bilateral Cumulation to Facilitate Manufacturing and Value Addition
A significant provision under Rule 5 permits bilateral cumulation of originating materials between India and New Zealand.
Under this mechanism, originating materials from one country used in the production of goods in the other country may be treated as originating in the country where the final goods are produced, subject to the prescribed conditions.
This provision is expected to facilitate integration of supply chains, encourage sourcing of inputs between the two countries and support manufacturing and value addition under the FTA.
Qualifying Value Content and Product-Specific Origin Criteria
Under Rule 6, where a Qualifying Value Content (QVC) requirement applies, the originating status of goods may be determined using either the Build-Down or Build-Up formula.
The Build-Down method calculates QVC by deducting the value of non-originating materials from the Free-on-Board (FOB) value, while the Build-Up method calculates QVC by reference to the value of originating materials as a percentage of FOB value.
Annexure-A specifies Product Specific Rules, including requirements relating to wholly obtained goods, changes in tariff classification and qualifying value content.
Notably, where the Build-Up method is used, the required QVC percentage is generally 10 percentage points lower than the percentage specified under the Build-Down method in Annexure-A. However, for goods falling under HS Chapter 71, the same specified QVC percentage applies under both methods.
De Minimis Relaxation for Non-Originating Materials
Rule 9 provides limited flexibility where certain non-originating materials do not satisfy the prescribed change in tariff classification requirement.
For goods other than those falling under HS Chapters 50 to 63, originating status may still be available where the value of such non-originating materials does not exceed 10% of the FOB value, subject to compliance with the other applicable requirements.
For textiles and textile articles falling under HS Chapters 50 to 63, a separate de minimis threshold of 10% of the total weight or value of the goods has been prescribed.
The rules also provide a limited 1% tolerance by weight or value in specified circumstances involving goods classified as wholly obtained.
These provisions offer measured flexibility without dispensing with the fundamental origin requirements.
Certificate of Origin and Origin Declaration Recognised as Proof of Origin
A key feature of the new framework is the recognition of different forms of Proof of Origin under Rule 16.
Preferential tariff treatment may be supported by a Certificate of Origin issued by the designated issuing authority or by an eligible Origin Declaration.
The rules provide for origin declarations by status holders in India and approved exporters in New Zealand, subject to the prescribed authorisation, monitoring and compliance requirements.
The framework also refers to declarations by exporters or producers, but the introduction of such declarations as an accepted form of Proof of Origin is subject to a review to commence upon completion of five years from the entry into force of the Agreement.
The rules thereby provide a structured framework for self-certification by eligible entities while retaining appropriate regulatory safeguards.
Proof of Origin Valid for 12 Months
Under Rule 16(3), a Proof of Origin must be in English, bear a unique certification or identification number, contain the prescribed particulars and establish that the goods satisfy the applicable origin requirements.
A Proof of Origin will remain valid for 12 months from the date of issuance of the Certificate of Origin or completion of the Origin Declaration, as applicable.
It may cover a single importation involving one or multiple goods, provided each product separately qualifies as originating.
The rules also permit retrospective issuance or completion of a Proof of Origin in exceptional circumstances, subject to the prescribed conditions, within 12 months after the date of importation.
Preferential Duty Benefits Subject to Valid Origin Documentation
Under Rule 22, importers claiming preferential tariff treatment must declare that the goods qualify as originating, possess valid Proof of Origin when making the declaration and furnish the same when required by Customs authorities.
Importers may also be required to provide supporting information and demonstrate compliance with the prescribed consignment conditions.
Where Proof of Origin is not produced, Customs authorities may deny preferential treatment, require appropriate security or take other measures permitted under applicable law to protect revenue interests.
Accordingly, proper origin documentation and supporting records will be essential for availing preferential customs duty benefits under the India–New Zealand FTA.
Third-Country Invoicing Permitted Subject to Origin Compliance
In an important trade facilitation provision, Rule 18 clarifies that preferential tariff treatment cannot be denied solely because the commercial invoice has been issued by a third-country entity or by a person other than the exporter, producer, approved exporter or status holder.
However, the goods must otherwise satisfy all requirements prescribed under the Rules of Origin.
This provision is particularly relevant for international supply chains involving intermediary trading entities and third-country invoicing arrangements.
Post-Import Preferential Duty Claims and Refunds Allowed
A major importer-friendly provision has been introduced under Rule 25, permitting post-importation claims for preferential tariff treatment.
Where an importer has not claimed preferential duty benefits at the time of importation, the importer may subsequently apply for such treatment and seek refund of excess customs duty paid, provided the goods qualified for preferential treatment when imported.
The importing country may require the claim and necessary supporting documents to be submitted within 12 months from the date of importation, or within a longer period where permitted under its domestic laws and regulations.
This provision provides an opportunity for eligible importers to seek preferential benefits even where such claims were not made at the initial stage of importation, subject to the applicable legal requirements.
Mandatory Record Retention for Five Years
Under Rule 23, exporters, producers, approved exporters, status holders and issuing authorities are required to preserve records supporting the originating status of goods for at least five years from the issuance or completion of Proof of Origin, or a longer period prescribed by applicable law.
Similarly, importers must retain relevant origin-related records for at least five years from the date of importation.
These records may include commercial documents, material cost details, production records, labour costs, overheads and other supporting information relevant to determining origin.
The requirement seeks to strengthen accountability and facilitate verification of preferential tariff claims.
Customs Authorities Empowered to Verify Origin Claims
Under Rule 26, Customs administrations are empowered to undertake origin verification at the time of importation or after release of goods.
Verification may be based on risk assessment, random selection or reasonable doubts regarding the authenticity or originating status of the goods.
The procedure may involve seeking information from importers, exporters, producers or designated authorities, examining supporting records and, where necessary, undertaking verification visits in accordance with the prescribed process.
The rules prescribe specific timelines, including 30 days for responses concerning the authenticity of issuance of a Certificate of Origin and 60 days for requests concerning the accuracy of origin determination, with permitted extensions in specified cases.
The framework also provides for written determination of origin and procedural opportunities to furnish additional information.
Preferential Duty Benefits May Be Denied for Non-Compliance
Under Rule 27, Customs authorities may deny preferential tariff treatment where goods fail to satisfy the prescribed origin criteria, insufficient information is furnished, or the parties concerned fail to comply with verification and documentation requirements.
The importer must be informed in writing of the reasons for denial.
Further, Rule 28 provides for temporary suspension of preferential tariff treatment in specified circumstances involving persistent or deliberate misrepresentation of the origin of goods, subject to the prescribed consultation and decision-making procedures.
Rule 29 also provides for applicable civil, administrative and, where appropriate, criminal sanctions for violations relating to customs laws, origin declarations and preferential duty eligibility.
Minor Documentation Errors Not to Automatically Disqualify Claims
A welcome trade facilitation provision under Rule 31 provides that a Proof of Origin shall not be rejected merely because of minor discrepancies or errors.
Such discrepancies may include spelling mistakes, typing errors, formatting issues, minor omissions or slight differences between documents, provided they do not create doubt regarding the originating status of the goods.
This provision is expected to reduce avoidable disputes arising from minor clerical and procedural errors.
Electronic Exchange of Origin Information Between India and New Zealand
To support transparency and verification, Rule 34 provides for the establishment of an electronic system for exchanging information relating to Certificates of Origin upon entry into force of the Agreement.
The rules further provide for an electronic system to exchange information on other forms of Proof of Origin within 12 months from the entry into force of the Agreement.
The introduction of origin declarations is linked to the establishment of the relevant electronic information exchange system for verifying the authenticity of self-declarations.
The initiative is intended to support greater administrative cooperation and facilitate more efficient verification of origin documentation between the two countries.
Expected Impact: Greater Trade Facilitation with Stronger Origin Compliance
The notification of the India–New Zealand Rules of Origin marks an important regulatory step in implementing the preferential trade framework under the bilateral Free Trade Agreement.
The provisions relating to bilateral cumulation, origin certification, qualifying value content, de minimis tolerance, third-country invoicing, post-import refunds and acceptance of minor documentary discrepancies are expected to provide clarity and procedural flexibility to eligible importers and exporters.
At the same time, the detailed verification procedures, mandatory record-keeping requirements and safeguards against origin misrepresentation are intended to ensure that preferential customs duty benefits are availed only for genuinely qualifying goods.
The new framework is expected to promote transparency, strengthen customs cooperation and facilitate legitimate bilateral trade between India and New Zealand.
Key Takeaway for Importers, Exporters and Customs Professionals
With effect from October 20, 2026, businesses seeking preferential customs duty benefits under the India–New Zealand Free Trade Agreement must ensure compliance with the newly notified Rules of Origin.
Importers and exporters should carefully examine applicable product-specific origin requirements, maintain valid Proof of Origin, preserve necessary production and transaction records, and ensure that their preferential tariff claims are supported by appropriate documentation.
The introduction of 12-month Proof of Origin validity, post-import preferential duty claims, bilateral cumulation and structured origin verification procedures represents an important development in the administration of preferential trade under the India–New Zealand FTA.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/10/Customs-Tariff-Determination-of-Origin-of-Goods-under-the-Free-Trade-Agreement-between-India-and-New-Zealand-Rules-2026.pdf
