NEW DELHI: Despite repeated assurances by the Central Board of Indirect Taxes & Customs (CBIC) ensuring judicious application of the CAROTAR 2020 rules and check on arbitrary practices during the customs clearance of goods, the importers continue to face hardships. Besides delays in consignments and disruption of the supply chain, the companies from the countries with which India has signed free trade agreement (FTA), continue to be harassed and are being asked to pay a bank guarantee instead (if not actual tariff).
And all this is happening despite the fact CBIC directed its field officers to initiate inquiry on the origin of imported goods only where there were ‘sufficient grounds‘ to suspect the origin of a good, or where the same was identified as a risk by the Risk Management System.
This situation seems to have rendered the Comprehensive Economic Partnership Agreement (CEPA) India entered into with countries like South Korea ensuring free trade almost obsolete and meaningless after the implementation of new Customs Rules of Origin (CAROTAR 2020) – Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 since September 21 last year.
“They are actually making the Korean companies pay bank guarantee at the rate of 10 percent of the import value and the interest rate is a big loss. The Indian government is not getting that money but the banks. This is not benefitting anyone and also sending the wrong messages. Therefore, we are very patiently waiting and observing. If this issue eventually doesn’t get resolved and people actually feel big pain about this, then we are certainly going to make an issue, but not yet. We are still observing and waiting for the authorities to sort things out,” Hee-chul Jung added.
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