What is a Free Sale Certificate and What is its Role in International Trade?

A Free Sale Certificate confirms that a product is legally manufactured and freely sold in the exporting country. It is an essential document for importing countries, assuring them of the product’s compliance with the domestic regulations of the exporting country. Here, you’ll find precise details about obtaining a Free Sale Certificate in India and the following regulations.

A Free Sale and Commerce Certificate, also known as a Certificate of Export, is a document required for exporting various goods such as medical devices, food items, cosmetics, and biological products. It confirms that the product is legally available for sale in the country of origin, is manufactured there, and is not subject to any export restrictions or prohibitions. 

However, it does not guarantee that the product has been tested for safety, and effectiveness, or officially approved for use in the country of origin. 

Typically issued by the national regulatory authority, this certificate assures the importing country that the product complies with the general regulations of the exporting country and is legally sold within its borders.

The Regional Authority (RA) of the Directorate General of Foreign Trade (DGFT) issues the Free Sale Certificate to exporters. In 2021, DGFT amended the application format for the Free Sale and Commerce Certificate, easing exporters’ regulatory compliance by removing the requirement to provide Registration-cum-Membership Certificate (RCMC) details and a declaration.

To apply for a Free Sale Certificate online, the following conditions must be fulfilled:

• Your user profile must be linked with an IEC
• Valid DSC should be registered in the system, which can be checked under My Dashboard > View and Register Digital Signature Token
• IEC must have valid RCMC details

During the application process, exporters need to submit the following details and documents to obtain a Free Sale Certificate:

• Importer Exporter Code (IEC)
• RCMC
• Details of products for which a Free Sale Certificate is requested
• Manufacturing license
• FSSAI Certificate
• Digital Signature Certificate (DSC)
• Export Order
• Product permission documents from the concerned authority

Here’s a step-by-step guide for exporters to obtain a certificate of free sale in India:

Visit the DGFT portal and log in to your account.

Go to the Services section and select Certificate Management.

Select Apply under the Free Sale and Commerce Certificate option. You can either begin a new application or continue with a previously saved draft.

On the Application Details page, fill in your details, such as IEC number, company name, contact information, and branch code. The RCMC details will be auto-filled based on the IEC number.

In the Purpose of Items Exported under Certificate section, provide the product details and any other required information.

In the Details of Items Exported under the Certificate section, enter the necessary details, including the manufacturer’s and buyer’s or importer’s information.

Upload the required documents on the next screen.

Complete the declaration, review the summary page, digitally sign the application, and click Submit to submit it.

After submission, proceed to the payment page, complete the payment, and download the receipt.

A confirmation message will appear with your application’s file number.

The Certificate of Free Sale remains valid for two years from its issuance date, unless stated otherwise. 

It is provided to exporters for products not governed by the Drugs & Cosmetics Act, 1940, intended for use in nursing homes, clinics, and hospitals for medical and surgical purposes, and not restricted from export. 

A Certificate of Free Sale verifies that a product is approved for sale and complies with local regulations. It is essential for items such as cosmetics, food, and medical devices, ensuring they are safe and authorized for sale, import, and export.

A Certificate of Origin, in contrast, serves an entirely different purpose by certifying the precise place of origin or manufacture of a product. These certificates are often issued by the local chamber of commerce in the exporting country and can facilitate the reduction or elimination of import duties in the destination country, provided the two nations have favorable Free Trade Agreements in place.

The absence of a Certificate of Free Sale can create significant disruptions in the supply chain. Without the required documentation, shipments may be detained or rejected by customs authorities, leading to delays. 

In some instances, this can result in fines, goods being returned to the exporting country, or even the destruction of products by customs officials.

The Free Sale Certificate is a document that streamlines international trade by certifying the legal status and compliance of products in their country of origin. It builds trust between exporters and importers while ensuring adherence to regulatory standards. 

For businesses, understanding its role and obtaining it efficiently can prevent supply chain disruptions and foster smoother global trade operations. 

Whether you’re new to exporting or expanding to new markets, a proactive approach to meeting such requirements ensures growth and credibility in the international market.