Rules 1 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.
The CAROTAR Rules, 2020 set out what an importer must do to claim a lower, preferential rate of duty under a trade agreement. Rules 1 to 4 cover the scope, definitions, what goes into the bill of entry, when the officer can deny the claim without verification, and the origin information the importer must hold in Form I. Importing needs an importer-exporter code, which our IEC registration service covers.
This article is written as amended up to Notification No. 14/2025-Customs (N.T.) dated 18 March 2025 (in force on publication), on the CBIC text of Notification No. 81/2020-Customs (N.T.) dated 21 August 2020; no official consolidated text exists. Later notifications should be checked. The 2025 amendment replaced "certificate" with "proof" in several places, so the Rules now speak of a "proof of origin". No duty rate is stated here; preferential rates are in tariff notifications.
The Rules apply where an importer claims a preferential rate of duty under a trade agreement. At the time of the bill of entry the importer declares that the goods are originating goods, indicates the tariff notification, produces the proof of origin and enters its details. The officer may deny the claim without verification in four cases and mark the proof "INAPPLICABLE". The importer must possess Form I information and keep supporting documents for at least five years.
Rule 1: name, start date and application
| Sub-rule | Content |
|---|---|
| 1(1) | Short title: the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 |
| 1(2) | In force on the 21st day of September, 2020 |
| 1(3) | They apply to import of goods into India where the importer claims a preferential rate of duty in terms of a trade agreement |
The Rules are made under section 156 read with section 28DA of the Customs Act, 1962; see our guide to section 28DA on claims of preferential rate.
Rule 2: definitions
- (b) "Preferential rate of duty": the rate at which customs duty is charged in accordance with a trade agreement.
- (c) "Preferential tariff treatment": allowing the preferential rate to goods imported in accordance with a trade agreement.
- (d) "Rules of Origin": rules notified for a trade agreement under section 5(1) of the Customs Tariff Act, 1975.
- (e) "Tariff notification": a notification under section 25(1) of the Act specifying preferential rates under a trade agreement.
- (f) "Verification": verifying the genuineness of a proof of origin, or the correctness of the information in it, in the manner prescribed by the respective Rules of Origin. The word "proof" was substituted for "certificate" by Notification No. 14/2025.
- (g) "Verification Authority": the authority in the exporting country or country of origin designated to respond to a verification request under a trade agreement.
Clause (a) defines "Act" and sub-rule (2) gives Act terms the same meaning here.
Rule 3: the preferential tariff claim
Rule 3(1): at the time of the bill of entry
To claim the preferential rate, the importer or his agent shall, when filing the bill of entry:
- (a) declare that the goods qualify as originating goods for the preferential rate under that agreement;
- (b) indicate the respective tariff notification against each item for which the rate is claimed;
- (c) produce the proof of origin covering each item; and
- (d) enter the details of the proof of origin in the bill of entry:
- (i) the reference number;
- (ii) the date of issuance;
- (iii) the originating criteria;
- (iv) whether accumulation or cumulation is applied;
- (v) whether the proof is issued by a third country (back-to-back); and
- (vi) whether the goods have been transported directly from the country of origin.
Rule 3(2): denial without verification
The claim may be denied by the proper officer without verification if the proof of origin:
| Clause | Ground |
|---|---|
| (a) | Is incomplete and not in accordance with the format prescribed by the Rules of Origin |
| (b) | Has any alteration not authenticated by the Issuing Authority |
| (c) | Is produced after its validity period has expired |
| (d) | Is issued for an item not eligible for preferential tariff treatment under the trade agreement |
In all these cases the proof is marked "INAPPLICABLE". The Explanation adds that clause (d) includes cases where goods are not covered in the respective tariff notification or where the product specific rule in the proof is not applicable to the goods.
Example: Lotus Electronics imports capacitors from a partner country and claims the preferential rate. Its bill of entry declares origin, names the tariff notification and enters the proof's reference number, issue date, criteria and whether it is a back-to-back proof. The proof expired before the date it was produced. Under clause (c) the officer may deny the claim without verification and mark the proof "INAPPLICABLE".
The 2025 change
Notification No. 14/2025-Customs (N.T.) dated 18 March 2025 replaced "certificate" with "proof" in rule 2(1)(f), rule 3(1)(c) and (d), rule 3(2) and rule 6(1). It also changed one item in Form I from "CoO" to "proof of origin" (Section III, Part B, paragraph 2, serial g). The Rules now say "proof of origin" throughout; any reference to a certificate of origin in older material should be read in that light. The Form I text is not held, so only the heading of the change is noted.
Rule 4: origin information the importer must possess
The importer claiming a preferential rate shall:
- (a) possess the information indicated in Form I to demonstrate how the country of origin criteria, including regional value content and product specific criteria in the Rules of Origin, are satisfied, and submit it to the proper officer on request;
- (b) keep all supporting documents related to Form I for at least five years from the date of filing of the bill of entry and submit them on request; and
- (c) exercise reasonable care to ensure the accuracy and truthfulness of the information and documents.
Form I is a prescribed form annexed to the Rules; this article describes only its purpose and the 2025 change.
How rules 1 to 4 fit with what follows
Where the officer doubts the claim, rule 5 allows a request for information and rule 6 a verification request to the Verification Authority; see our article on rules 5 to 8. The origin rules for each agreement are separate; for examples, see our overviews of the India UAE CEPA rules of origin, the India Australia ECTA rules of origin and the India ASEAN rules of origin.
Practical checklist
- Before filing, confirm that the goods are covered by the tariff notification and the agreement's product specific rule.
- Obtain a valid, complete proof of origin without unauthenticated alterations.
- Enter every proof detail in the bill of entry: number, date, criteria, cumulation, back-to-back and direct transport.
- Prepare Form I information and keep supporting documents for at least five years.
- Exercise reasonable care; errors can lead to denial.
A valid importer-exporter code is needed for the bill of entry.
Need help with a preferential origin claim?
If you import under a trade agreement and want a clean origin file, we can check the proof of origin and Form I information against the rules. Start with our IEC registration service if you do not yet hold a code.
Key takeaways
- CAROTAR applies to every preferential rate claim under a trade agreement.
- The bill of entry must carry a declaration, the tariff notification and the proof of origin details.
- Four defects allow denial without verification, with the proof marked "INAPPLICABLE".
- Since 18 March 2025 the Rules say "proof of origin" instead of "certificate".
- Form I information must be held and documents kept for at least five years.
Read next
- Rules 5 to 8: requisition, verification and denial of preference
- Section 28DA of the Customs Act, 1962: claim of preferential rate under a trade agreement
- India UAE CEPA rules of origin: overview
- India Australia ECTA rules of origin: overview
Disclaimer: Based on the customs rules named above as published on the CBIC Tax Information Portal and, for sets amended since 2023, the amending notifications (read through a TaxClue consolidated reading text; no official consolidated text exists), as consulted on 3 October 2026. Later notifications, rates and the Customs Act, 1962 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.