Importers To Do Due Diligence For Availing Duty Benefits Under FTAs From Sept. 21: Finance Ministry
This follows completion of the 30-day period that was given to stakeholders to familiarise themselves with new provisions.
Importers will from Monday have to do their due diligence to ensure that imported goods meet the prescribed 'rules of origin' provisions for availing concessional rate of customs under free trade agreements, the finance ministry said.
The Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020), notified on Aug, 21, 2020, shall come into force from Sept. 21, 2020, the ministry said in a statement on Friday.
This follows completion of the 30-day period that was given to importers and other stakeholders to familiarise themselves with new provisions.
"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," it added.
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.
"The new Rules would strengthen the hands of the Customs in checking any attempted misuse of the duty concessions under FTAs," the statement added.
Finance Minister Nirmala Sitharaman, in her Budget speech, had mentioned about the need to protect the domestic industry from misuse of free trade agreements.
"Undue claims of FTA benefits have posed threat to domestic industry. Such imports require stringent checks. In this context, suitable provisions are being incorporated in the Customs Act, 1962," she had said.
CAROTAR 2020 supplements the existing operational certification procedures prescribed under different trade agreements.
The Central Board of Indirect Taxes and Customs has been actively engaging with stakeholders through webinars and other means to guide them on compliance with the new rules and to clarify their doubts.
India has inked FTAs with several countries, including Japan, South Korea, Singapore and ASEAN members.
Under such agreements, two trading partners significantly reduce or eliminate import/customs duties on the maximum number of goods traded between them.