’CAROTAR Rules 2020’
29th Sep, 2020
Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 sets guidelines for enforcement of the ‘rules of origin’
Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 sets guidelines for enforcement of the ‘rules of origin’ for allowing preferential rate on imports under free trade agreements took effect as of September 21, 2020.
- CAROTAR, 2020 aims to protect the domestic industry from misuse of FTAs.
- CAROTAR, 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.
Free Trade Agreement
- A free trade agreement (FTA) is a treaty between two or more countries to facilitate trade and eliminate trade barriers. It aims at eliminating tariffs completely from day one or over a certain number of years.
- Free trade agreements helps create an open and competitive international marketplace.
Significance of the new 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 strengthen the hands of the Customs in checking any attempted misuse of the duty concessions under FTAs.