New Delhi: The idea is to plug third country imports from countries such as China reach ing India using the concessional duty or zero-duty benefit available under FT As.
While India has signed FTAs with several key countries, such as Japan, South Korea, ASEAN members (which include Thailand, Singapore and Vietnam), it do es not have a similar arrangement with China.
Finance ministry sources said that from September 21, when new rules of orig in under FTAs comes into force, customs officials would strictly verify all major import consignments to check for any misuse of the trade agreement and would also need proper verification documents to be provided by importers.
The FTA imports, particularly of electronic items, refrigerators, air-conditioner, camera, mobiles and telecom equipment, set-top box, parts like head phones, camera modules, aggarbatti, and other items in which rampant misuse is likely, would be under the lens and Importers claiming benefits will face s trict scrutiny by customs.
From September 21 the new rules – Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 or CAROTAR comes into effect that casts a greater onus on the importer to satisfy customs officials that the goods being imported and claiming FTA benefits meet the 35 percent value addition in the country of export.
Preferential duty would be denied if sufficient declaration is not given by the importer. Also, if it is found that benefit has been wrongly availed in respect of a consignment, the FTA benefit would be denied in subsequent consignments of identical goods.
The customs department is explaining the new Rules and necessary precautions that importers require to take to comply with these Rules so as to avoid hassles later, said the Finance Ministry Sources adding that stricter provisions on rules of origin have been introduced as the domestic industry was claiming serious damage on accounts of these imports and had been urging the Government to take strict action to curb such irregular imports done by flouting FTA provisions.
