CAROTAR Rules, 2020
CAROTAR is Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020. It came into force in September, 2020. These rules are set of guidelines that enforce the “rules of origin” for the rate on imports under Free Trade Agreements.
What are CAROTAR rules?
- Under these rules, an importer is required to do due diligence before importing goods.
- The rules provide a list of minimum information to be possessed by the importer.
- An importer should enter origin related information in the Bill of Entre as available in the Certificate of Origin.
What are the impacts CAROTAR rules?
The new rules are being executed to check shipments of low-quality products into India. The rules will also bring in strict restrictions on dumping of goods by a third country. This will help India to keep a check over dumping of low-quality products by a third country, especially China.
The CAROTAR rules support the importer to ascertain the country of origin, assist Customs authorities, claim concessional duty. It will strengthen the Customs department to check attempted misuse of duty concessions under Free Trade Agreements.
Need for CAROTAR
CAROTAR 2020 supplements existing certification procedures prescribed under different Free Trade Agreements. India has inked Free Trade Agreements with several countries such as south Korea, Japan and several other ASEAN countries.
India under its Look East Policy aims to increase its trade and connectivity with the ASEAN region. This is mainly directed in the development of the North East Region. In order to achieve this, India has signed ASEAN Free Trade Agreement. Under the agreement, India offers concessional customs to all the ten countries of ASEAN. China has been using this route to dump its goods in India. This means that the goods originating in China (produced in China) that are not eligible for customs concessions or on import ban in India will enter India through these countries. CAROTAR rules helps to prevent this as the importer has to disclose the origin of the goods under these new rules.
Category: Economy & Banking Current Affairs