Tighter origin norms for FTA benefits, high onus on importer

Reference:CGTN | Updated: 2 February 2020

New Delhi: Importers claiming preferential rates of duty under any trade agreement will now have to declare that the goods qualify as originating goods and must possess sufficient information about their origin criteria, and regional value content.

The government has inserted a new chapter in the Customs Act on administration of rules of origin under trade agreements giving the government the power to suspend and refuse the preferential tariff treatment in case of incomplete information or verification and noncompliance.

It also states that a submission of a certificate of origin “shall not absolve the importer of the responsibility to exercise reasonable care”.

“In the coming months, we shall review Rules of Origin requirements, particularly for certain sensitive items, so as to ensure that FTAs are aligned to the conscious direction of our policy,” said finance minister Nirmala Sitharaman while announcing the budget.

In certain cases, the certificate of origin shall be marked inapplicable.

The move comes in the wake of the government trying to curb imports through tighter origin norms in trade pacts as the trade deficit was a whopping $118.1 billion in the April-December period.

As per industry, this move is protectionist and gives sweeping power to the customs officials.

“It might lead to corruption at the field level,” said a Delhi-based exporter.

ANTI-DUMPING, SAFEGUARD DUTIES Sitharaman also said that provisions relating to safeguard duties, which are applied when surge in imports causes serious injury to domestic industry, and for checking dumping of goods and imports of subsidised goods are also being strengthened to ensure level-playing field for domestic industry.
A provision has been incorporated in the Countervailing Duty Rules to enable investigation into case of circumvention of countervailing duty for enabling imposition of such duty.

The budget has also said the assessment must take into consideration the conditions of competition between the imported products and the conditions of competition between the imported products and the like domestic products while imposing antidumping duty.