CAROTAR 2020 — Customs (Administration of Rules of Origin under Trade Agreements) Rules — fundamentally shifted FTA origin liability in India. The supplier's origin certificate is no longer sufficient; the importer must hold supporting evidence and is liable for the claim.
What changed in 2020
Pre-CAROTAR: an FTA origin certificate from the supplier (Form A under GSP, country-specific forms under bilateral FTAs) was generally accepted at face value. Post-CAROTAR: the importer must:
- File Form I in the BoE declaring the origin claim
- Hold supporting evidence on value-addition, manufacturing process, and the producer's records
- Retain this evidence for 5 years
- Produce it within 10 working days if customs demands it
Form I — what's in it
| Part | Information |
|---|---|
| A | Importer details, BoE reference, FTA being claimed |
| B | Origin criterion claimed (Wholly Obtained, Sufficient Working, RVC threshold met) |
| C | Producer's name and address; manufacturing description |
| D | Originating and non-originating material breakdown |
Supporting evidence to hold
- Producer's bill of materials (BoM) showing originating vs non-originating inputs
- Cost statement showing value-addition computation if claiming RVC (Regional Value Content)
- Manufacturing flow chart
- Producer's invoices for raw materials
- Country-of-origin certificate (Form A, AIFTA, IJCEPA, etc. as applicable)
The audit defence
Customs can issue a verification request to either the supplier (through the partner-country authority) or directly to the importer. If the importer can't produce evidence within 10 working days, the FTA preference is denied and full BCD plus interest is recoverable.
The trap most importers fall into
Suppliers will issue Form A or country-specific certificates routinely — but few maintain BoM and cost-statement evidence in audit-grade form. By the time customs verifies, three years have passed, the supplier has no records, and the importer carries the duty differential.
Practical steps
- Before placing the order — confirm the supplier can provide BoM and cost statement
- At PO — make CAROTAR-compliant documentation a contractual deliverable
- At shipment — collect Form I supporting evidence with the commercial invoice
- At BoE filing — file Form I correctly with all parts populated
- Post-import — archive the evidence in audit-ready form for 5 years
If you claim FTA preference on imports — ASEAN, Korea, Japan, UAE — let us audit your CAROTAR documentation before the next vessel sails. One missing BoM at audit time can wipe out three years of duty savings.