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CAROTAR Rules

  • Posted By
    10Pointer
  • Categories
    Polity & Governance
  • Published
    22nd Aug, 2022

Context:

The Union Finance Ministry recently clarified certain provisions of Customs (Administration of Rules of Origin under Trade Agreements) CAROTAR Rules.

About

  • The Ministry has advised customs field officers to be sensitive in applying CAROTAR and maintain consistency with the provisions of relevant trade agreements or its Rules of Origin.
  • It also clarifies that the exemptions specified in a Free Trade Agreement (FTA) with regard to the country of origin would prevail in case of a conflict between the revenue department and an importer.
  • India has inked FTAs with several countries, including UAE, Mauritius, Japan, South Korea, Singapore, and ASEAN members.
  • Under FTA, the trading partners agree to significantly reduce or eliminate import/customs duties on the maximum number of goods traded between them, besides relaxing norms to promote trade in services and investments.

About Free Trade Agreement

  • It is an arrangement between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tariff and non-tariff barriers on substantial trade between them.
  • It covers trade in goods (such as agricultural or industrial products) or trade in services (such as banking, construction, trading etc.). 
    • It also covers other areas such as intellectual property rights (IPRs), investment, government procurement and competition policy etc.
  • India has inked FTAs with several countries, including Japan, South Korea, Sri Lanka and ASEAN members.
  • Benefits:
    • By eliminating tariffs and some non-tariff barriers, FTA partners get easier market access into one another's countries.
    • Exporters prefer FTAs to multilateral trade liberalization because they get preferential treatment over non-FTA member country competitors.

About CAROTAR Rules

  • These Rules came into effect from September 21, 2020.
    • It was notified on 21st August 2020.
  • It empowers the customs officers to ask the importer to furnish further information, consistent with the trade agreement, in case the officer has reasons to believe that the country-of-origin criteria have not been met.

 Where the importer fails to provide the requisite information, the officer can make further verification consistent with the trade agreement.


Verifying, please be patient.

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