The REX System or the Registered Exporter system is a scheme introduced by the European Union that came into effect in India from January 2017. As the name suggests it involves registering of exporters. It introduced the system to streamline trade and reducing the expenditures on part of the exporters. This also helps to develop countries to benefit from the unilateral tariff preferences. What this means is that a REX number gets you preferential treatment when you (export industry) export goods to the European Union, in the form of Zero or reduced custom rates. Unfortunately, India has stayed removed from the list of GSP beneficiaries since March 2019.
Why do you need REX?
- If you are an exporter to the European Union, then getting a REX is mandatory.
- Once registered, you can self-certify the rules of origin of goods. The origin of goods is a certificate you had to provide while exporting your goods to other countries. If it enlists you in the REX framework, you can self-confirm your merchandise with an assertion of root and dispose of administrative problems and deferrals.
- In case you belong to a GSP (Generalized System of Preferences) beneficiary country and possess REX number, you can avail tariff benefits.
- An (export industry) exporter registered in the REX system can avail EU GSP preferential tariff for goods valued at over EUR6000.
How to register under the REX system?
- Basically, if you are an exporter, you will need to fill up a REX application form in the format 1C. You will also need to submit all relevant details regarding the status of the origin of the goods you are dealing with.
- The applicant and a local user who verifies the information using the importer-exporter code must sign the REX application form.
- The filled-in submitted to a competent authority. The officers verify the applicant’s credentials and register you.
- I assign a 20 digit REX number to every registered exporter.
- Once registered the exporter can contact the competent authorities anytime to change his profile.
- In case of a company closure, the exporter can ask the authorities to revoke his REX.
- The competent authorities can demand accounting and manufacturing process details.
- In case the exporter commits fraud, the competent authority can revoke his REX registration.
- A registered (export industry) exporter must maintain records of all certificates of origin issued by him for at least three years.
Competent Authority for REX in India
- Local Administrator of India for Administrative Cooperation- Department of Commerce
- Local Administrators for Registration- At present, there are sixteen entities in the country it displays whose names along with the names of the officers in charge in the DGFT (Director General of Foreign Trade) website. Some Local Administrators in India are the DGFT, Textiles Committee, Silk Board, Spices Board, Tobacco Board, and several SEZs.
- Local Users- Chosen by Local Administrators. They help the exporters to register in the REX system; receive and verify applications; document applications; conduct regular checks and audits; and also recommend revocations.
Things to remember
- It should take care in preparing the Origin of goods certificate. All details showed on the DGFT website must be provided appropriately.
- Note that all certificates of origins given by a registered exporter have a validity of 12 months only.
- An exporter registered under the REX system should not have any bankruptcy proceedings against him or unpaid Custom dues.
Though the REX system makes the life of an exporter considerably easier, the individual is solely responsible for the proper maintenance of records and how he makes use of it. Never hesitate to consult with the nodal officers. The local administration office or the local users to get your queries answered.
