Central Board of Indirect Taxes & Customs (CBIC) has issued Notification No. 81/2020-Customs in order to introduce Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020) which shall come into force from 21st day of September, 2020 and to prescribe the guidelines regarding implementation of procedure regarding claim of preferential rate of duty in respect of Rules of Origin under Trade Agreements (FTA/PTA/CECA/CEPA) and verification of Certificates of Origin.
Key Points of the Notification are:
1. CAROTAR, 2020 shall apply to import of goods into India where the importer makes claim of preferential rate of duty in terms of a trade agreement.
2. The importer or his agent in order to claim preferential rate of duty under a trade agreement shall, at the time of filing bill of entry :
(a) make a declaration in the bill of entry that the goods qualify as originating goods for preferential rate of duty under that agreement;
(b) indicate in the bill of entry the respective tariff notification against each item on which preferential rate of duty is claimed;
(c) produce certificate of origin covering each item on which preferential rate of duty is claimed; and
(d) enter the below mentioned details of certificate of origin in the bill of entry, namely –
i. certificate of origin reference number;
ii. date of issuance of certificate of origin;
iii. originating criteria;
iv. indicate if accumulation/cumulation is applied;
v. indicate if the certificate of origin is issued by a third country (back-to-back); and
vi. indicate if goods have been transported directly from country of origin.
3. The claim of preferential rate of duty may be denied by the proper officer without verification if the certificate of origin is – incomplete and not in accordance with the format as prescribed by the Rules of Origin; has any alteration not authenticated by the Issuing Authority; is produced after its validity period has expired or is issued for an item which is not eligible for preferential tariff treatment under the trade agreement.
4. The importer claiming preferential rate of duty shall –
(a) possess information, as indicated in Form I, and submit the same to the proper officer on request;
(b) keep all supporting documents related to Form I for at least five years from date of filing of bill of entry and submit the same to the proper officer on request;
(c) exercise reasonable care to ensure the accuracy and truthfulness of the aforesaid information and documents.
5. Where, during the course of customs clearance or thereafter, the proper officer has reason to believe that origin criteria prescribed in the respective Rules of Origin have not been met, he may seek information and supporting documents to ascertain correctness of the claim and the importer shall furnish such information or documents to the proper officer within ten working days from the date of such information or documents being sought.
6. Where, on the basis of information and documents received, the proper officer is satisfied that the origin criteria prescribed in the respective Rules of Origin have been met, he shall accept the claim and inform the importer in writing within fifteen working days from the date of receipt of said information and documents.
7. The Principal Commissioner of Customs or the Commissioner of Customs may, for the reasons to be recorded in writing, disallow the claim of preferential rate of duty without further verification, where (a) the importer relinquishes the claim; or (b) the information and documents furnished by the importer and available on record provide sufficient evidence to prove that goods do not meet the origin criteria prescribed in the respective Rules of Origin.
8. The proper officer shall conclude the verification within forty five days of receipt of the information, or within such extended period as the Principal Commissioner of Customs or the Commissioner of Customs may allow where the information requested in this rule is received within the prescribed timeline.
9. The Principal Commissioner of Customs or the Commissioner of Customs may, without further verification, reject other claims of preferential rate of duty, filed prior to or after such determination, for identical goods imported from the same exporter or producer where it is determined that goods originating from an exporter or producer do not meet the origin criteria prescribed in the Rules of Origin.
10. The Principal Commissioner of Customs or the Commissioner of Customs in case of a claim on identical goods is rejected shall- (a) inform the importer the reasons of rejection in writing including the detail of the cases wherein it was established that the identical goods from the same exporter or producer did not satisfy the origin criteria; and (b) restore preferential tariff treatment on identical goods with prospective effect, after it is demonstrated on the basis of information and documents received, that the manufacturing or other origin related conditions have been modified by the exporter or producer so as to fulfill the origin requirement of the Rules of Origin under the trade agreement.
For detailed guidelines for filing up the Form I and further information please refer the attached document.