India notifies CAROTAR, 2020 in respect of Rules of Origin under Trade Agreements effective from September 21, 2020

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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, which take effect as of September 21, 2020.

The notifications of such can be found here (Notification 81/2020) and here (Circular No 38/2020). 

The most important change which has been brought to the existing framework is making the importer liable for all information in relation to imported goods where preferential duty claim has been made.

Origin related information to be possessed by the importer. The importer claiming a preferential rate of duty shall- (a) possess information, as indicated in Form I, to demonstrate the manner in which country of origin criteria, including the regional value content and product-specific criteria, specified in the Rules of Origin, are satisfied, and submit the same to the proper officer on request.

This would be a major shift. During the course of customs clearance or thereafter, customs has reason to believe that origin criteria prescribed in the respective Rules of Origin have not been met, they may seek information and supporting documents, as may be deemed necessary, from the importer to ascertain the correctness of the claim. The importer shall provide the same information within ten working days.

BDP recommends all importers to start compiling information for filling Form I (Page No. 6-13 of Csnt81-2020), especially Section III which provides for:

1.) Briefly describe the production process undertaken in the country of origin with respect to production of the imported good. Also, state which of the originating criteria prescribed in the Rules of Origin has been claimed.

2.)If the goods are not wholly obtained, the manufacturing/processing undertaken in country of origin must be ascertained.

As we expect CAROTAR 2020 to be implemented from September 21, 2020, it would be important that Form I is completed and kept ready by all importers.

Should you have any questions or concerns related to this change, please reach out to your BDP representative.