GSP

Generalized System of Preferences (GSP)

The Generalized System of Preferences (GSP) is a system under which developed countries grant preferential tariffs to imports from developing countries. The scheme was created following recommendations by the United Nations Conference on Trade and Development (UNCTAD). It is also based on the WTO's enabling clause, which permits developed countries to create trading preferences for developing countries. GSP and the preferential tariffs allow developing countries, particularly Least Developed Countries, like Nepal, to access international markets. 

Procedure to obtain Generalized System Preference (GSP) Form A from the Trade and Export Promotion Centre

Trade and Export Promotion Centre (TEPC) has its head office in Kathmandu and two regional offices in Biratnagar in Province 2 and Nepalgunj in Province 5 from where GSP Form A is available at nominal service charges, as follows:

·       GSP Form A = Rs. 25/set

·       GSP Form A = Rs. 10/set (for carpet and other floor covering)

Documents required to be submitted along with the GSP Form A

·       Copies of Company/Firm Registration Certificates.

·       Copies of VAT/PAN/Tax Registration Certificates.
 

Export of carpets and other floor covering products need to pay additional fees to obtain the recommendation (NPR 3/sq m, for a carpet of the specification below 80 knots and NPR 5/sq m, for a carpet of the specification below 80 knots ). 

Procedure to obtain Generalized System Preference (GSP) from the EU, Norway, Switzerland, and Turkey

As from January 1, 2017, in the EU, Norway, Switzerland, and Turkey, the EU REX System has been applied in the Generalized Scheme of Preferences. In Nepal, it became effective from July 1, 2018. It is the system of certification of origin of goods which is based on a principle of self-certification by exporters who will make out themselves statement on the origin. The EU REX System progressively and completely replaced the system of Certification through GSP Form A issued by TEPC by the self-declaration for certification of statements on the origin of goods in the invoice itself.

Required steps:

• Exporters need to be registered in the REX system (Click here)
• Email a copy of the submitted form to TEPC and submit the hard copy duly signed with the company's seal along with an application for REX number and valid copy of EXIM registration for an official record.
• Then exporter will receive the REX number from TEPC will become a "registered exporter" in the EU REX System and eligible to claim self-certification of statement on the origin of goods

The sample documents are also available here.  To find more information about REX System, click here.
 

Countries which accept GSP Form A (Certificates of Origin) for the purposes of the Generalized System of Preferences (GSP):

Australia, New Zealand, Canada, Japan, Russian Federation, Turkey, United States of America*, United Kingdom

European Union: Belarus, Austria, Finland, Netherlands, Belgium, France, Poland, Bulgaria, Hungary, Portugal, Cyprus, Ireland, Romania, Norway, Czech Republic, Italy, Slovakia, Denmark, Latvia, Slovenia, Switzerland including Liechtenstein, Estonia, Lithuania, Spain, Germany, Luxembourg, Sweden, Greece, Malta

For the Republic of Korea, GSP Form A can be obtained from the Trade and Export Promotion Centre, Onespot Export Clearing House, Babarmahal, Kathmandu.  

Other countries providing duty-free-quota-free access are Brazil, China, Chile,  Thailand, Republic of Korea, South Africa, etc. 

Full details of the conditions covering admission to the GSP in these countries are obtainable from the designated authorities in the exporting preference-receiving countries or from the customs authorities of the preference-giving countries listed above. An information note is also obtainable from the UNCTAD secretariat.

* GSP program expired on December 31, 2020 (19 U.S.C. Section 2465). As a result, U.S. imports entering the United States that were eligible for duty-free treatment under GSP up to that date are now subject to regular, Normal Trade Relations (MFN) rates of duty. These rates are shown in the U.S. tariff schedule (https://hts.usitc.gov/) under the column with the heading “General”.

FAQs on US GSP can be found in the link https://ustr.gov/sites/default/files/gsp/GSPExpirationFAQ.pdf

US Congress which was sought to make any decisions on whether to extend authorization of GSP. The 117th Congress convenes on January 3rd, 2021 was not able till the date as of February 27, 2022.

General conditions for GSP eligibility

To qualify for preference, products must:

(a)  fall within a description of products eligible for preference in the country of destination. The description entered on the form must be sufficiently detailed to enable the products to be identified by the customs officer examining them;

(b)  comply with the rules of origin of the country of destination. Each article in a consignment must qualify separately in its own right; and,

(c)  comply with the consignment conditions specified by the country of destination. In general, products must be consigned directly from the country of exportation to the country of destination but most preference-giving countries accept passage through intermediate countries subject to certain conditions. (For Australia, direct consignment is not necessary).

For details visit the Incentives section.