Customs Functions related to Preferential Trade Agreements - CBEC's Customs Manual 2023 - Customs

Chapter 35: Customs Functions related to Preferential Trade Agreements 1. Introduction 1.1 One of the chief functions of Customs, as the guardian of the economic frontiers of the country, is to administer tariffs, valuation and origin regulations and, also, strike a fine balance with trade facilitation. 1.2 Bilateral and multilateral f T Ag have become a prominent feature, in the trading system, allowing preferential tariff treatment to partnering countries. Customs officer, at the port, is required to have sufficient knowledge of all existing trade agreements and ability to apply and implement the correct rules corresponding to each of trade agreements, under which the preferential benefit claim has been made. 1.3 With each such agreement laying down a unique set of trade rules, and with the proliferation of such agreements, there also being overlap of within multiple trade agreements, the role of customs officer has assumed much greater significance as well as has become equally challenging. 1.4 Under the overarching umbrella of such bilateral and multilateral trade agreements, Central Board of Indirect Taxes Customs has a direct role to play in the following aspects- Policy To analyse impact of the proposed preferential trade agreement on revenue. To provide inputs on Rules of Origin Chapter and related operational certification procedures under negotiation. To notify the agreed tariff rate under each of the agreements, under the Customs Act 1962. To notify the Rules of Origin, as agreed under Customs Act 1962. To highlight any issues in implementation of the agreement and suggest amendments. To study possible mechanisms to reduce compliance costs and dwell time, with respect to clearance of goods, claiming preferential tariff. At the time of Customs clearance To ensure that goods claiming preferential tariff treatment meet all the conditions as laid out in respective Agreements. To ensure that Customs declaration claiming preferential tariff is supported by all necessary information, as listed out in the customs notification, with respect to the said preferential trade agreement as well as Section 28DA of the Customs Act, 1962 read with the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 [CAROTAR, 2020] notified vide notification No. 81/2020-Customs (N.T.) dated 21.08.2020 To ensure that the proof of origin is valid, authentic and complete. Enforcement Conduct detailed investigation, in cases where misuse is suspected or reported. Make appropriate references for verification of suspect documents during the course of investigation