CAROTAR explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
An importer who claims a lower duty under a trade agreement has to show that the goods originate in the partner country. The substantive test is in the rules of origin notified for each agreement; the procedure for the claim and its checking is in the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020, known as CAROTAR, made under section 156 read with section 28DA of the Customs Act, 1962. Notification No. 14/2025-Customs (N.T.) of 18 March 2025 replaced the word "certificate" with "proof" of origin in rules 2, 3 and 6 and in Form I. If a preferential claim has been questioned or suspended, our legal consultation service can review the file.
To claim a preferential rate, the importer declares originating status in the bill of entry, names the tariff notification, produces a proof of origin and enters its details (rule 3(1)). The importer must possess the Form I information showing how the origin criteria are met, keep the documents for five years, and exercise reasonable care (rule 4). Information asked for must be given within ten working days (rule 5(2)). Customs may verify with the exporting country's Verification Authority and suspend the preferential rate meanwhile, releasing goods against security on request (rule 6).
Why "proof" and not "certificate"
The Finance (No. 2) Act, 2024 amended section 28DA so that "proof of origin" means a certificate or declaration issued in accordance with a trade agreement, certifying or declaring that the goods meet the origin criteria; see our article on section 28DA. The Customs (Administration of Rules of Origin under Trade Agreements) Amendment Rules, 2025 brought CAROTAR in line, in force from their publication in the Official Gazette:
| Where | Before | After 14/2025-Customs (N.T.) |
|---|---|---|
| Rule 2(1)(f), "Verification" | Genuineness of a certificate of origin | Genuineness of a proof of origin |
| Rule 3(1)(c) and (d), (d)(i), (ii), (v) | Produce and enter details of the certificate of origin | Produce and enter details of the proof of origin |
| Rule 3(2) | Denial where the certificate is defective | Denial where the proof is defective |
| Rule 6(1), (1)(a), (b) | Verification of the certificate of origin | Verification of the proof of origin |
| Form I, Section III, Part B, para 2(g) | "CoO" | "proof of origin" |
So an origin declaration that a trade agreement allows in place of a certificate can support the claim, and the same checks apply to it. Exporters looking at the Indian side of certification can read how to get a certificate of origin in India.
Rules of origin and CAROTAR: two different texts
"Rules of Origin" in CAROTAR means the rules notified for a trade agreement under section 5(1) of the Customs Tariff Act, 1975 (rule 2(1)(d)). Each agreement has its own set; the CBIC list shows new sets for the India-EFTA TEPA (Notification No. 59/2025-Customs (N.T.), from 1 October 2025), the India-Oman CEPA (No. 48/2026, from 1 June 2026) and the India-UK CETA (No. 62/2026, from 15 July 2026). CAROTAR sits on top of all of them. Where CAROTAR and a set of rules of origin conflict, the rules of origin prevail to that extent (rule 8(3)).
Making the claim: rule 3
At the time of filing the bill of entry, the importer or agent must:
- declare in the bill of entry that the goods qualify as originating goods under the agreement;
- indicate the tariff notification against each item claimed;
- produce a proof of origin covering each item; and
- enter its details: reference number, date of issue, originating criteria, whether accumulation or cumulation applies, whether it was issued by a third country (back-to-back), and whether the goods were transported directly from the country of origin.
Under rule 3(2) the proper officer may deny the claim without verification where the proof of origin is incomplete or not in the prescribed format, has an alteration not authenticated by the Issuing Authority, is produced after its validity has expired, or is for an item not eligible under the agreement. The document is then marked "INAPPLICABLE".
What the importer must hold: rule 4 and Form I
The importer must possess the information indicated in Form I to show how the origin criteria, including regional value content and product-specific criteria, are met, and give it to the proper officer on request. Supporting documents are kept for at least five years from the date of filing the bill of entry, and the importer must exercise reasonable care as to their accuracy.
Example. Lumen Fixtures Pvt Ltd imports LED drivers at a preferential rate under a trade agreement. Its file for each consignment holds the proof of origin, the supplier's cost break-up showing the regional value content, and the tariff-shift working. When Customs asks for information, it replies within the ten working days and the claim is accepted.
Requisition, verification and suspension: rules 5 and 6
| Step | Rule | Period as printed |
|---|---|---|
| Importer supplies information or documents sought | 5(2) | Within ten working days |
| Officer accepts the claim and informs the importer | 5(3) | Within fifteen working days of receipt |
| Failure or insufficient reply: verification proposal to the nodal officer | 5(4) | No period printed |
| Response from the Verification Authority | 6(3) | As in the agreement; otherwise sixty days |
| Officer concludes verification | 6(6) | Within forty-five days of receipt, or as extended, or as the rules of origin provide |
Verification may be sought where the genuineness of the proof of origin is doubted, where there is reason to believe the origin criterion is not met, or on a random basis (rule 6(1)). If verification on the first two grounds starts during clearance, the preferential rate may be suspended, and the officer may, on request, assess provisionally under section 18 against security equal to the difference between the provisional duty and the preferential duty (rule 6(4)); see our article on section 18 provisional assessment. The claim may be denied without further verification where the Verification Authority does not respond in time or in the required manner, or where the record shows the goods do not qualify (rule 6(7)). The Principal Commissioner or Commissioner may also disallow it where the importer relinquishes the claim (rule 5(5)).
Identical goods and compulsory verification: rules 7 and 8
Once goods from an exporter or producer are found not to meet the criteria, other claims for identical goods from the same source, before or after that finding, may be rejected without further verification, with reasons given to the importer; preference is restored prospectively once the exporter shows the conditions have changed (rule 7). An importer who fails to give information in time, or does not exercise reasonable care, has all later preferential bills of entry put on compulsory verification under section 17(2) until adequate record-based controls are shown (rule 8(1)); see section 17.
Common mistakes
- Treating the proof of origin as the whole case. Section 28DA(2) and rule 4 put the burden of reasonable care on the importer.
- Leaving the bill of entry fields incomplete. Cumulation, back-to-back issue and direct transport must be indicated.
- Missing the ten working days. Late or thin replies lead straight to a verification proposal.
- Using an expired or altered document. Rule 3(2) allows denial without verification.
Need help with a preferential claim?
If a claim is suspended, denied or marked "INAPPLICABLE", or later bills of entry have been put on compulsory verification, our legal consultation team can review the origin file and the reply.
Key takeaways
- CAROTAR, 2020 governs how preferential claims are made and checked; each agreement's rules of origin set the test.
- Since Notification No. 14/2025-Customs (N.T.), CAROTAR speaks of a "proof of origin", which can be a certificate or a declaration.
- The bill of entry must carry the declaration, the notification and the proof-of-origin details.
- Form I information is held by the importer and documents kept for five years.
- Replies are due in ten working days; the preferential rate can be suspended during verification.
Read next
- Section 28DA: claim of preferential rate of duty under a trade agreement
- Self-certification of origin: the approved exporter route
- Paragraph 2.62 of the Foreign Trade Policy, 2023: certificates of origin and the approved exporter scheme
- Paragraph 2.93 of the Handbook of Procedures, 2023: non-preferential rules of origin
Disclaimer: Based on the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (Notification No. 81/2020-Customs (N.T.)) as published on the CBIC Tax Information Portal, read with the Amendment Rules, 2025 (Notification No. 14/2025-Customs (N.T.), 18 March 2025), as consulted on 3 October 2026. The origin criteria for any agreement are in that agreement's own rules of origin. This article is general information, not legal advice; check the official text before acting.