REX System Under GSP: Salient Features and Details

 



Until 2017, customs authorities were in charge of issuing certificates on declaration/statement of origin to exporters. However, the new Registered Exporter (REX) registration system under the Generalised System of Preferences (GSP) eliminates the need for this intervention. It is aimed at smoothening the trading process by certifying an exporter to declare his/her own statement on origin. 


What is the REX registration system? 

From 2017, the REX registration is treated as the only valid proof for statement of origin. A certified exporter under the REX system can legally issue his/her own statement on origin for the importer, which will be the only permissible declaration of origin. It is important to note that “invoice declaration” and “declaration of origin” are two distinct entities now, and neither can replace each other. 


Benefits enjoyed by an international importer (outside India)

With the REX system under GSP, certain goods are exempted from custom duty, if these goods are imported from an exporter who has a valid REX registration. This reduces the costs incurred by certain importers who import these certain goods on a regular basis. However, it is important to note that not all goods come with exemption or relief from custom duty, and to avail the benefit, the exporter must be a Registered Exporter (REX). 


Benefits enjoyed by an exporter

The REX system grants more power to exporters. Exporters having a valid verification under REX do not have to rely on any external agency and can issue their own “statement on origin”. This eliminates any intervention from the custom authorities, which was previously prevalent. 


Risks and safety measures 

Importers can often face uncertainties of whether a Registered Exporter has issued the correct declaration of origin. This calls for advanced security measures from an importer. 

Exporters face the risk of penalties. Any wrong statement of origin that is issued erroneously or deliberately by an exporter will evidently lead to custom sanctions or even crime charges.  This calls for extra attention from an exporter as well. 




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