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CBIC instructs field offices to streamline verification of COOs under CARTOR rules


The Central Board of Indirect Taxes and Customs (CBIC)’s internal customs division has instructed field officers to avoid raising unnecessary requests for verification of preferential certificates of origin under the Customs Administration of Rulf Origin under Trade Agreements Rules or CAROTAR rules.

The Board said in a letter dated December 17 to field units that enquiries on origin of imported goods should be raised only where there are ‘sufficient grounds’ to suspect origin of a good, or where the same has been identified as a risk by the risk management system.

“They should be suitably supervised to ensure that unnecessary queries are not raised on account of goods origin,” the Board has instructed, noting representations from trade on difficulties being faced on account of multiple queries or importers being asked to directly seek clarifications from the issuing authorities of the exporting country.

CAROTAR rules permit that in case the assessing officer has some doubt on the validity of the certificate of origin, he can contact the free trade agreement (FTA) cell of CBIC which in turn will contact the exporting country’s authority.

The rules have been put in place since September 21 this year, as per which importers will have to furnish proof of 35% value addition in goods imported under FTAs to customs authorities, failing which duty benefits available under the agreements will be denied.

However, the Board flagged that requests to the FTA cell were not being sent in the proper format or after lapse of the outer limit of 10 days of getting inputs from the importer. For instance, requests were continuing to come in physical form, when field offices have been asked to send emails.

“It is observed that a significant number of such requests have to be returned on account of being deficient, thus leading to delay in verification process and adversely impacting trade facilitation,” the Board said.

In some cases, scanned documents were found to be illegible, certificates were being sent without requisite covering letter to indicate nature of request and bulk certificates were being sent rather than specific ones.

“Some requests do not appear to merit verification,” it said, such as in cases where name of issuing authority is not available, even in cases where same is not mandated as per that specific trade agreement, or specimen seal and signatures are not available for cases where same has already been communicated by the Board.

Abhishek Jain, tax partner at EY said that the move to allay concerns of trade and instructions to offices was needed to ensure avoiding unwarranted delays for importers and exporters.

“This is a smart move on the part of the government and will be much appreciated by the industry, as this while preventing revenue leakage will ensure that the shipments are not unnecessary delayed at customs ports,” he said.

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