The Indian Customs Rules-2020 is likely to make tariff preference in its market toughest for anyone, fear Bangladeshi trade officials and experts.
The rules, issued by revenue department and that took effect in late September, aim to administer the rules of origin under all trade agreements signed by India.
A senior commerce ministry official told the FE that the new rules seem to have been prepared to deny tariff preference to any country in the Indian market.
Bangladeshi officials are examining the document and asked revenue board, tariff commission, and export promotion bureau to check how restrictive the rules will be in case of seeking tariff preference, he added.
According to the rules, an importer or his agent shall at the time of filing bill of entry make a declaration that the goods qualify as originating goods for a preferential rate of duty under a trade deal.
They should also indicate tariff notification against each item on which preferential rate of duty is claimed, and produce a certificate of origin covering each item.
The importers should enter details of certificate of origin which include reference number, date of issuance, originating criteria, indicate if accumulation/cumulation is applied, if the certificate is issued by a third country and if goods have been transported directly from the country of origin.
It said the claim for a preferential rate of duty can be denied without verification if the certificate of origin is incomplete and not in accordance with the format as prescribed by the rules of origin.
Even it can be denied if the certificate has any alteration not authenticated by the issuing authority, is produced after its validity has expired, or is issued for an item which is not eligible for preferential tariff treatment.
The rules also asked an importer to keep all supporting documents for at least five years from the date of filing of the bill of entry and submit those to an officer concerned on request any time.
If the importer fails to provide requisite information and documents by 10 days, the official will send a verification proposal to the designated nodal officer.
The customs commissioner may disallow the claim for a preferential rate of duty without further verification if the information and documents provide sufficient evidence to prove that goods do not meet the origin criteria.
If it is determined that goods originating from an exporter or producer do not meet the criteria prescribed in the rules of origin and imported by the same producer again, the customs official can reject claims on preferential duty without further verification.
Contacted on Tuesday, Bangladesh Trade and Tariff Commission member Mostafa Abid Khan said he examined the document and found some discrepancies in it.
"We will have to compare the conditions of the new customs rules with the SAFTA rules to check how trade-restrictive it will be," he told the FE.
Centre for Policy Dialogue research director Dr Khondaker Golam Moazzem said Bangladeshi products are the highest recipients of tariff preferences in India. Thus, the new rules apply most in the case of those.
The 'country of origin' under the rules of origin criteria is the key focus of compliance under the new rules. It has made it specific about the provisions of a 'third country' in case of preference benefits.
"A growing apprehension of rising inflow of goods from a specific neighbouring country through other countries would be one of the issues of consideration in case of new rules," Mr Moazzem told the FE.
"Bangladeshi exporters may face various types of constraints and challenges in compliance with the documentation and following proper submission process."
If they are not adequately knowledgeable about changes and maintaining documentation accordingly, he said, their export would face constraints under tariff preferences.
Mr Moazzem suggested that importers and exporters set the standard operating procedures (SoPs) in case of sourcing from Bangladesh.
The commerce ministry should sit with the exporters to identify possible difficulties under the new rules and support them to take measures accordingly.
Otherwise, Mr Moazzem feared, Indian importers may induce imports without preferential tariff to avoid those complications. This would reduce Bangladesh's export to India, he added.