Importers will have to do their due diligence from Monday to ensure that imported goods meet the prescribed \u2018rules of origin\u2019 provisions for availing concessional rate of customs duty under free trade agreements (FTAs), the Finance Ministry said.<\/p>\n
The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020), notified on August 21, shall come into force from September 21, the Ministry said in a statement on Friday. <\/p>\n
This follows completion of the 30-day period that was given to importers and other stakeholders to familiarise themselves with new provisions. \u201cAn 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.<\/p>\n
\u201cAlso, an importer would now have to enter certain origin related information in the Bill of Entry, as available in the Certificate of Origin,\u201d the Ministry added. <\/p>\n
Ministry sources said the ASEAN (Association of Southeast Asian Nations) 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 \u2014 Indonesia, Malaysia, Thailand, Singapore and Vietnam.<\/p>\n
The benefit of concessional customs duty rate applies only if an ASEAN member country is the country of origin of goods. <\/p>\n
This means that goods originating from China and routed through these countries will not be eligible for customs duty concessions under the ASEAN FTA.<\/p>\n
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 Ministry said.<\/p>\n
\u2018Protect local industry\u2019<\/h2>\n
In her Budget speech, Finance Minister Nirmala Sitharaman had mentioned the need to protect domestic industry from misuse of free trade agreements. <\/p>\n
CAROTAR 2020 supplements the existing operational certification procedures prescribed under different trade agreements.<\/p>\n
India has inked FTAs with several countries, including Japan, South Korea and ASEAN members. <\/p>\n
Under such agreements, two trading partners significantly reduce or eliminate import\/customs duties on the maximum number of goods traded between them.<\/p>\n<\/div>\n