Third-Country Invoicing Inapplicable For Electronic/Non-Electronic Toy Parts From China For Preferential Customs Duty Benefit: Mumbai AAR

In a ruling dated December 11, 2025 Shri. Prabhat K. Rameshwaram rejected Applicant's reliance placed on Circular no. 53/2020 dated December 08, 2020 to impress that third party invoicing is generally allowed. The CAAR clarified that the aforesaid Circular endorsed acceptance of a third party invoicing 'exclusively' for the Duty-Free Tariff Preference Scheme for Least Developed Countries, only in case of wholly obtained goods. To corroborate this finding, the CAAR referred to the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 [CAROTAR], Notification No. 50/2018‑Cus (Exemption Notification), APTA Rules of Origin. The CAAR gave a categorical finding that under APTA there were not provisions for third-country invoicing.

Applicant, engaged in the business of providing end to end EXIM compliance consultancy sought to avail the benefit of preferential customs duty under the Asia Pacific Trade Agreement ('APTA') on the import of its products. They sought clarification on applicability APTA on import of Swiss brand electronic toys/ non-electronic toys manufactured in China satisfying the origin criterion when invoicing was done by the Swiss third-party but goods originate from China.

The Applicant emphasized that preferential tariff benefits should not be denied merely due to procedural issues in invoicing, provided origin criteria and documentation were satisfied.

The transaction flow included a Supplier located in Switzerland who engages with vendors in China to manufacture toys wherein Goods were shipped directly from China to India. Thereafter, Swiss Supplier invoices Jparks India under the third‑party invoicing model for import of electronic/non-electronic toy/toy parts into India from China .

On whether third‑party invoicing in toy imports from China when a Swiss supplier was raising invoices was valid for claiming APTA preferential duty exemption, the CAAR answered in negative. From General Conditions in the notes for completing Certificate of Origin instructions, the CAAR inferred that Preferential duty benefit under APTA may be granted in a third-party invoicing scenario if the following three were satisfied

• the goods satisfy the originating criteria under Rules 2–5
• the goods satisfy the direct consignment requirement under Rule 6, and
• the Applicant establishes complete documentary linkage between the CoO issued by the exporting APTA State, the transport documents, and the third country commercial invoice

The CAAR relied on principle of substantive conditions cannot be relaxed as enumerated by SC in case of Hari Chand Shri Gopal, Dilip Kumar and distinguished Applicant's reliance on Boston Scientific, Olam Enterprises India as the same pertained to ASEAN – India FTA.

The CAAR explained on how to determine eligibility for preferential treatment under APTA. The CAAR clarified on when can imported goods be qualified as originating products. It was also added that preferential treatment may be claimed only when supported by a valid Certificate of Origin issued by the designated authority of the exporting Participating State.

Case Detail: Jparks India Private Limited

For Applicant: Mr. Nishant Shah and Ms. Supriya Singh

Click here to read the AAR order.