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.
