CBIC Clarifies Rules of Origin: Trade-Agreement Terms Prevail Over CAROTAR, and Form-I Is Not Mandatory for India–UK CETA Claims

What changed: CBIC has issued Circular No. 43/2026-Customs, dated 24 September 2026, clarifying how Section 28DA of the Customs Act, 1962 and the CAROTAR 2020 rules operate alongside the rules of origin written into India's trade agreements. The headline: where the two conflict, the trade agreement's rules of origin prevail. For the India–UK Comprehensive Economic and Trade Agreement (CETA), a valid origin declaration is sufficient proof of origin, and Form-I is not a precondition for claiming the preferential (lower or nil) tariff. Who it affects: every importer claiming FTA preference into India, and the customs brokers who file their bills of entry. What to do: claim preference on a valid origin declaration; do not assume you must collect Form-I or confidential supplier data up front.

What Happened

Section 28DA and the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — "CAROTAR" — set out the due diligence and information an importer must be able to show when claiming a preferential tariff under a Free Trade Agreement. Over time, trade feedback was that CAROTAR's information demands (including Form-I) were being applied in ways that sat uneasily with the actual text of newer agreements, creating friction and delayed clearances even for genuine origin claims.

Circular 43/2026 addresses that. Its main clarifications:

• Agreement prevails on conflict. Where CAROTAR 2020 and a trade agreement's rules of origin differ, the rules of origin under the trade agreement govern.
• India–UK CETA — Form-I not mandatory. A valid origin declaration from the UK exporter or producer is sufficient proof of origin. Form-I is not a precondition for a preferential tariff claim.
• Form-I only on a triggered basis. Information of the Form-I type may be sought only when a bill of entry is flagged by the National Risk Management System (RMS) for an origin-related check and the officer has reasonable grounds to doubt that the origin criteria are met.
• No forced disclosure of confidential data. Importers are not required to obtain confidential information from foreign suppliers, and the non-furnishing of such information cannot, by itself, be a ground to deny preferential treatment.
• "Identical goods" safeguard. Under Section 28DA(11), before a prior origin determination is applied to a later identical import, the importer must be given the opportunity to furnish additional information. Goods that merely share a description or tariff classification are not "identical" if material origin-related facts differ.

Field formations are directed to implement this uniformly across all customs zones.

Why / Background

India has signed a series of trade agreements in recent years, and the India–UK CETA is among the most significant. Each agreement carries its own rules of origin — the tests (value addition, change in tariff heading, specific processing) that decide whether goods "originate" in the partner country and so qualify for the preferential tariff. CAROTAR was designed to stop misuse of preference (routing third-country goods through a partner), but if applied too mechanically it can burden legitimate importers. This circular re-balances that: preference is a treaty right, and the treaty text — not a domestic form — is the primary reference.

Who Benefits

Importers claiming preference under India–UK CETA and other FTAs get smoother clearance: a valid origin declaration suffices, and they are not forced to extract commercially sensitive cost or process data from suppliers before claiming. Customs brokers get clearer filing guidance. Exporters in partner countries benefit indirectly, because their Indian buyers face fewer documentary hurdles to pass on the tariff saving. The measure narrows the scope for arbitrary denial while preserving the ability to check genuinely doubtful cases through RMS.

What Importers Should Do Now

• Claim on the origin declaration. For India–UK CETA, base preferential claims on a valid origin declaration from the exporter/producer; do not treat Form-I as a mandatory attachment.
• Keep origin evidence ready, not necessarily filed. Maintain the ability to support the origin claim if your bill of entry is flagged by RMS, but do not over-collect confidential supplier data up front.
• Push back on blanket Form-I demands at clearance, citing Circular 43/2026, where an officer requests it without an RMS flag and reasonable doubt.
• Review "identical goods" positions. If a prior determination is being applied to your repeat imports, assert your right to furnish additional information before it is applied.
• Re-read the specific agreement's origin rules for each preference you claim, since those now clearly govern over any conflicting CAROTAR reading.

What CHAs Should Do

• Update filing SOPs so preferential claims under CETA proceed on the origin declaration without automatically seeking Form-I.
• Keep Circular 43/2026 to hand to resolve queries at assessment.
• Document any RMS-triggered origin check and the specific information requested, so responses are proportionate.

The Bigger Picture

With the India–UK CETA in force and the India–EU agreement advancing toward signature, the value of getting origin compliance right is rising fast: the tariff savings are large, but so is the cost of a denied or delayed preferential claim. This circular signals that CBIC wants preference to flow on treaty terms, with checks reserved for risk-flagged, genuinely doubtful cases rather than applied as a universal documentary tax. Exporters and importers who build clean, treaty-aligned origin files will move goods faster and capture the preference reliably.

Frequently Asked Questions

Does CAROTAR still apply? Yes. CAROTAR 2020 and Section 28DA remain in force. The circular clarifies that where they conflict with a trade agreement's rules of origin, the agreement prevails.

Do I still need Form-I for India–UK CETA? Not as a precondition. A valid origin declaration is sufficient. Form-I-type information may be sought only on an RMS-flagged, reasonable-doubt basis.

Can customs deny my preference if my supplier won't share confidential data? Not on that ground alone. Non-furnishing of confidential supplier information cannot, by itself, justify denying preferential treatment.

What about repeat imports of the same goods? A prior origin determination cannot be applied to a later identical import without first giving you the chance to furnish additional information; mere sameness of description or classification does not make goods "identical."

Does this apply to all FTAs or just CETA? The prevailing-agreement principle applies generally; the Form-I clarification is framed around India–UK CETA. Check the specific agreement's rules for each claim.

Conclusion

For FTA importers this is a welcome simplification: claim preference on a valid origin declaration, keep supporting evidence ready for risk-flagged cases, and resist blanket documentary demands that the circular does not require. As India's FTA network widens, treaty-aligned origin compliance is becoming one of the highest-return disciplines in the import process.

Verify the exact wording against Circular No. 43/2026-Customs and the relevant trade agreement's rules of origin on the CBIC website (cbic.gov.in) before relying on it for a preferential claim.