Topics Covered: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
CAROTAR 2020 Rules:
Context:
The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020) came into force on September 21.
What are these rules?
They set guidelines for enforcement of the ‘rules of origin’ for allowing preferential rate on imports under free trade agreements.
- They supplement the existing operational certification procedures prescribed under different trade agreements (FTA/ PTA/ CECA/ CEPA).
Background:
They were notified on 21st August, 2020 by the Department of Revenue. 30 day period was given to importers and other stakeholders to familiarize themselves with new provisions.
CAROTAR rules:
- 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.
- An importer would now have to enter certain origin related information in the Bill of Entry, as available in the Certificate of Origin.
Implications:
The new norms have been framed with a view to check inbound shipments of low quality products and dumping of goods by a third country routed through an FTA partner country.
- Under these rules, a country that has inked an FTA with India cannot dump goods from some third country in the Indian market by just putting a label on it.
Significance of these rules:
The new Rules will support the importer to correctly ascertain the country of origin, properly claim the concessional duty and assist Customs authorities in smooth clearance of legitimate imports under FTAs.
- The new Rules would also strengthen the hands of the Customs in checking any attempted misuse of the duty concessions under FTAs.
Sources: PIB.
