Customs Tariff Rules 2026 for India–Oman CEPA: Origin of Goods and Preferential Duty

The Central Government has issued the Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between India and Oman) Rules, 2026, to implement the preferential tariff framework agreed under the Comprehensive Economic Partnership Agreement between India and Oman signed on 18 December 2025. These Rules come into force from 1 June 2026 vide Notification No. 48/2026-Customs (N.T.) dated 29 May 2026.

This notification creates a detailed legal regime to determine when goods qualify as “originating products” of India or Oman and thus become eligible for concessional customs duty under the CEPA tariff schedules. It also codifies documentation, verification, and enforcement mechanisms to prevent misuse or circumvention of preferential benefits.

1.1 Statutory backing

  • Rules are framed under the powers granted by sub-section (1) of section 5 of the Customs Tariff Act, 1975 (51 of 1975).
  • They govern origin determination exclusively for goods traded under the India–Oman CEPA, not for general MFN trade.

1.2 Objective of the Rules

The Rules aim to:

  • Lay down origin criteria (wholly obtained, value addition, Product Specific Rules, CTC etc.).
  • Ensure only genuinely originating goods of India or Oman enjoy preferential tariff treatment.
  • Provide a consistent procedure for Certificates of Origin, electronic or physical.
  • Create a transparent framework for verification, denial, restoration, and refund of preferential duties.
  • Facilitate regulatory cooperation between Indian and Omani customs and trade authorities.

2. Key Definitions and Interpretive Framework

2.1 Core definitions

The Rules define various expressions essential for origin determination, including:

  • “Agreement” – the CEPA between India and Oman signed on 18 December 2025.
  • “CIF value” – the price actually paid/payable when loaded out of the carrier at port of import, including cost, insurance and freight, consistent with Article VII of GATT 1994 and the Customs Valuation Agreement.
  • “FOB value” – the price at which the product is loaded onto the carrier at the port of export, including all costs to bring the product on board.
  • “Ex Works price” – amount paid to the producer at the place where last processing occurred, including value of all materials used.
  • “originating material” – material that meets these Rules of Origin.
  • “non-originating material” – material from countries other than the Parties, of undetermined origin, or not satisfying these Rules.
  • “preferential tariff treatment” – duty concession as per Annex 2A (India’s tariff commitments) and Annex 2B (Oman’s commitments).
  • “Customs Administration” – for India, CBIC; for Oman, Directorate General of Customs, Royal Oman Police.

Several operational concepts such as “indirect material”, “fungible products or materials”, “aquaculture”, “GAAP”, “producer”, “product”, “production”, “Party”, “tariff classification” and “value of non-originating materials” are also precisely described.

2.2 Interpretation principles

  • HS classification: All origin tests based on tariff shift or PSR rely on the Harmonised System (HS) as the classification basis.
  • Cost and value accounting: All costs and values must be recorded and maintained in line with GAAP applicable in the Party where the product is produced.

3. Origin Criteria under the India–Oman CEPA

3.1 General test: Wholly obtained or sufficiently worked

A product will qualify as originating in a Party and thus enjoy preferential tariff treatment if it:

  1. Is wholly obtained or produced in that Party in terms of rule 5, or
  2. Undergoes sufficient working or processing as per the Product Specific Rules (PSR) in Annexure-B.

Additionally, final manufacture before export must necessarily occur in the exporting Party, even where bilateral cumulation or non-originating inputs are used.

3.2 Computation of value addition (VA)

The Rules permit two alternative methods for computing value addition referred to in the PSR in Annexure-B. The producer may choose either:

3.2.1 Build-down method

𝑉𝐴 = (FOB value or Ex Works price − Value of Non Originating Materials) × 100 / (FOB value or Ex Works price)

  • “VA” is expressed as a percentage of the FOB/Ex Works value.
  • Value of non-originating materials is based on:
    • CIF value at the time of import, or
    • earliest ascertainable price for materials of undetermined origin in the Party where processing occurs.

3.2.2 Build-up method

𝑉𝐴 = (Value of Originating Material + direct labour cost + direct overhead cost) × 100 / (FOB value or Ex Works price)

  • Value of originating material includes:
    • material cost;
    • freight and insurance associated with those materials.
  • Direct labour cost covers:
    • wages, remuneration and allied employee benefits linked to manufacturing.
  • Direct overhead cost is broadly defined and may cover, among others:
    • factory rent, insurance, depreciation, maintenance, taxes, interest on mortgage;
    • leasing and interest on plant and equipment;
    • plant security, utilities, R&D, design and engineering;
    • dies, moulds, tooling and depreciation;
    • royalties or licence fees tied to patented machinery or processes;
    • inspection and testing, storage, handling, waste disposal;
    • port/clearance charges and import duties used in computing value of raw materials.

3.3 Wholly obtained or produced products (Rule 5)

Products treated as wholly obtained in a Party include:

  • Plants and plant products grown or harvested there.
  • Live animals born and raised there.
  • Products derived from such live animals.
  • Minerals and natural resources extracted from soil, waters, seabed, or subsoil.
  • Products from hunting, trapping, fishing or aquaculture carried out there.
  • Sea fishing and other marine products taken from outside territorial sea by vessels or factory ships registered, recorded or licensed with that Party and flying its flag.
  • Products (other than sea fishing and marine products) extracted from the seabed or subsoil of the Party’s continental shelf or exclusive economic zone.
  • Waste and scrap (other than precious metals) from consumption or manufacturing in that Party, only fit for recovery of raw material or disposal.
  • Goods made entirely from the above items.

4.