CAROTAR rules

#GS3 #Economy

 

The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020) shall come into force from September 21.

  • Importers will have to do their due diligence to ensure that imported goods meet the prescribed ‘rules of origin’ provisions.
  • This is the essential availing concessional rate of customs duty under free trade agreements (FTAs).
  • 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.

 

Why need CAROTAR?

  • CAROTAR 2020 supplements the existing operational certification procedures prescribed under different trade agreements.
  • India has inked FTAs with several countries, including Japan, South Korea and ASEAN members.
  • Under such agreements, two trading partners significantly reduce or eliminate import/customs duties on the maximum number of goods traded between them.
  • The new rules will assist customs authorities in the smooth clearance of legitimate imports under FTAs.

 

Significance

  • The ASEAN FTA allows imports of most items at nil or concessional basic customs duty from the 10-nation bloc.
  • Major imports to India come from five ASEAN countries — Indonesia, Malaysia, Thailand, Singapore and Vietnam.
  • The benefit of concessional customs duty rate applies only if an ASEAN member country is the country of origin of goods.
  • This means that goods originating from China and routed through these countries will not be eligible for customs duty concessions under the ASEAN FTA.
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