New Indian customs rules are against the principles of South Asian Free Trade Agreement and similar trade deals, Bangladesh customs and trade officials said.
They said that the Rules of Origin of SAFTA might prevail over the newly adopted customs rules of India if any conflict arises.
The National Board of Revenue in a recent letter to the commerce ministry also said that Indian authorities had forced their importers to follow a complex and demanding procedures for availing duty benefits under the trade agreement.
India in September 2020 introduced a new Customs (Administration of Rules of Origin under Trade Agreement) Rules-2020 that includes a number of provisions importers should follow to enjoy duty benefits.
Trade officials said that the provisions were contradictory to the Rules of Origin of SAFTA.
The Indian customs rules issued by the Central Board of Indirect Tax and Customs, however, said that the SAFTA RoO provisions would prevail over other rules if there is any conflict.
‘In the event of a conflict between a provision of these rules and a provision of the Rules of Origin, the provision of the Rules of Origin shall prevail to the extent of the conflict,’ it said.
In this context, Bangladeshi exporters should follow the SAFTA rules instead of new Indian rules, Bangladesh officials said, adding that the government should also start consultation with the neighbouring country to resolve the issue.
Earlier in December, the commerce ministry requested Indian authorities to address the inconsistencies and make the rules aligned with the SAFTA rules.
Responding to the commerce ministry letter, Indian customs authorities, however, said that they found no inconsistencies in the rules.
Customs wing of the NBR said that Indian move was a violation of the principles of the international trade agreements, including SAFTA.
In its opinion, Customs international trade and agreement wing of the NBR said a number of provisions, including mandatory inclusion of some information in the bill of entry, might discourage the importers to avail the duty benefits under the trade agreements.
Providing the information in the bill of entry is not required as the information is given in the rules of origin certificates of the exporting country, it said.
Indian customs rules also prohibited acceptance of date expired RoO certificates though the SAFTA RoO allows such certificates in case of any exceptional situations, including natural calamities.
The rules have also made preservation of RoO certificates and other information for five years mandatory and submission to the customs authorities as per requirement.
But the SAFTA RoO has a provision of preserving the certificates for two years.
The documents, which are considered as confidential, can be supplied to the government agencies of importing countries as per requirement, it said.
The Indian customs rules have also empowered its customs commissioners to reject the preferential claim of the importers while SAFTA RoO said the certificate of origin could not be rejected in case of small mistakes in the information given in CoO or other documents including import certificates, invoice and packing list.
The rules have also made mandatory providing some information and declarations by importers that they are not supposed to know and only exporters may know the information related to origin of the product, the NBR said in the letter.
Such provisions show their negative mindset over trade agreements, it said.
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