CBIC announces Rules of Origin for India-Australia ECTA

As India Australia ECTA is scheduled to be implemented from Dec 29, CBIC in its notification has maped out the Rules of Origin. For companies looking to take benefit of the Indian- Australia FTA, a detailed perusal and compliance of the origin rules remains indispensable.

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Central Board of Indirect Taxes and Customs (CBIC) has announced the Rules of Origin under the India-Australia interim trade pact. India and Australia had signed the Economic Cooperation and Trade Agreement (ECTA) earlier in April this year. The ECTA will be effective from 29 December 2022.  In its notification called ‘Customs Tariff (Determination of Origin of Goods under the India-Australia Economic Cooperation and Trade Agreement) Rules 2022’, CBIC lays out the origin criteria, based on which the product would be eligible for preferential customs duty. The notification by CBIC would help businesses evaluate the benefits of the ECTA for their products.

Abhishek Jain, Partner Indirect Tax, KPMG in India said, “It is important to note that each FTA has its own origin rules and nuances thereof, and given the CAROTAR provisions which were introduced by the Indian government in 2020, the onus is on Indian importer to ensure that the said rules are duly complied with. As such, for companies looking to take benefit of the Indian- Australia FTA, a detailed perusal and compliance of the origin rules remains indispensable.”

RoAs prescribe the baseline for value addition in the country concerned to qualify for the tax concessions under the FTA, so that the benefits are not misused by firms based in other countries.