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CBIC vide their flyer on Customs (Administration of Rules of Origin under Rules of Origin under Trade Agreements) Rules, 2020 (‘CAROTAR’) have inter alia explained the background of foreign trade and the requirement to impose the said Rules. In the recent trends of Foreign Trade, there has been a staggered reduction in preferential duties under existing Foreign Trade Agreements (‘FTAs’) along with resultant increase in the preferential trade volumes. Further, frequent instances of misuse have come to notice of the Government in which fraudulent traders have mis-declared country of origin in order to avail undue duty concessions.
Owing to the above-mentioned fraudulent mis-use of the FTAs, the Government had inserted Chapter VAA and section 28DA in the Customs Act. The new section inter alia provided for a basic level of due diligence on the part of an importer to satisfy himself that the claimed originating criteria have been met, and that mere submission of a Certificate of Origin may not be sufficient.
In light of the above background, the CBIC has provided the following clarifications in respect of CAROTAR 2020 vide the FAQs in the flyer:
The summary of the provisions of CAROTAR 2020 may be accessed at https://www.gstlegal.co.in/newsletter-detail.html?id=425
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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