On 21st August 2020, The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020) was notified by the Central Board of Indirect Taxes and Customs (CBIC), and it is going to come into force from 21st September, 2020 upon the completion of the 30 days period that was given to the importers and other stakeholders to familiarize themselves with the new provisions.

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The CAROTAR, 2020 is going to implement the Finance Minister’s commitment about which she has said in her Budget Speech of 2020 that it will protect the domestic industry from misuse of FTAs. “Undue claims of FTA benefits have posed threat to domestic industry. Such imports require stringent checks. In this context, suitable provisions are being incorporated in the Customs Act, 1962,” said the Finance Minister in her Budget Speech.

CAROTAR, 2020 is to be read with CBIC Circular No. 38/2020-Cus, dated 21st August 2020 supplement the existing operational certification procedures prescribed under different trade agreements (FTA/ PTA/ CECA/ CEPA). An importer is now required to do due diligence before importing the goods to ensure that they meet the prescribed originating criteria. A list of minimum information which the importer is required to possess has also been provided in the rules along with general guidance. Also, an importer would now have to enter certain origin related information in the Bill of Entry, as available in the Certificate of Origin.

The Importer will now correctly ascertain the country of origin, properly claim the concessional duty and would assist Customs authorities in the smooth clearance of legitimate imports under FTAs with the help and support of these New Rules mentioned in CAROTAR, 2020. Because of this, only the CBIC was actively engaging with stakeholders through webinars and other means to guide them on compliance with the new rules and to clarify any doubts that they might have.

CBIC is expecting that these new Rules would strengthen the hands of the Customs in checking any attempted misuse of the duty concessions under FTAs.

With Warm Regards,

CL Bureau.

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