Maintaining the consistency between CAROTAR Rules and the relevant trade agreement or its Rules of Origin!

Exordium

1. Subsequent to the insertion of?Section 28DA (Procedure regarding the claim of preferential rate of duty)?in?Customs Act, 1962?on 27.3.2020, the CBIC?Notification No. 81/2020-Customs (NT) dated 21.08.2020 notified the?Customs (Administration of Rules of Origin under Trade Agreements)("CAROTAR") Rules, 2020.
2. Further, as you are also aware, the operational certification procedures related to the implementation of Rules of Origin (pertaining to each trade agreement - FTA/ PTA/ CECA/ CECA/ CECPA), stand separately notified under?Section 5?of?the Customs Tariff Act, 1975.
3. For uniform and judicious application of provisions, the Board has previously issued?:-

• Circular No.38/2020-Customs dated 21.08.2020,?
• Instruction No.20/2020-Customs dated 17.12.2020?&?
• No.18/2021-Customs dated 17.08.2021,?and
• the letter F.No.15021/18/2020(ICD) dated 13.11.2020.

What's the instruction now?

Before proceeding further, kindly note that, Section 28DA makes it incumbent upon an importer to possess sufficient information as regards the manner in which country of origin criteria, including the regional value content and product specific criteria, specified in the Rules of Origin in the trade agreement, are satisfied. For this purpose, CAROTAR, 2020 has provided a form, containing list of basic minimum information which an importer is required to obtain while importing goods under claim of preferential rate of duty. Therefore, in case there is a doubt with regard to origin of goods, information would be first called upon from the importer of the goods, in terms of rule 5 read with rule 4 of CAROTAR, 2020, before initiating verification with the partner country in terms of rule 6.

Now, In continuation of the same, field formations are sensitized by drawing attention again to?section 28DA.

It is emphasized that its sub-section (3) empowers the proper officer to ask the importer to furnish further information, consistent with the trade agreement,

In case the proper officer has reasons to believe that the country-of-origin criteria have not been met. Similarly, its sub-section (4) enables the proper officer, where the importer fails to provide the requisite information for any reason, to cause further verification consistent with the trade agreement.

Moreover, in the Rules, rule 8 (3)?states - “In the event of a conflict between a provision of these rules and a provision of the Rules of Origin, the provision of the Rules of Origin shall prevail to the extent of the conflict.”

Feel free to reach me at [email protected] or +91 9953357999 for any clarification/query.