Time for CAAR 2.0: Revolutionising India’s customs rulings for global efficiency

India’s customs system underwent a significant positive transformation with the establishment of the Customs Authority for Advance Rulings (CAAR).

By Prashant Narang 

As global trade partners scrutinise India's customs framework amidst rising tariffs and import barriers, the Customs Authority for Advance Rulings (CAAR) stands at a crossroads. With international pressure mounting for more predictable and efficient trade processes, can CAAR rise to the challenge of delivering faster, more reliable rulings?

In 2021, India’s customs system underwent a significant positive transformation with the establishment of the Customs Authority for Advance Rulings (CAAR), replacing the Authority for Advance Rulings (AAR). The government deserves commendation for decisively moving beyond AAR's bureaucratic inefficiencies, which often saw advance rulings (ARs) languishing unresolved for as long as four to five years. CAAR, in stark contrast, now routinely delivers rulings within months, frequently adhering to the statutory timeline of 90 days. Such a meaningful improvement merits recognition and highlights India’s growing commitment to easing the process of doing business.

However, while CAAR’s progress is commendable, there remains considerable scope for further refinement. According to a recent detailed study conducted at TrustBridge, analysing 414 CAAR rulings from January 2021 to August 2024, just 46.2% of rulings met the mandated 90-day timeline. This implies that more than half (53.8%) exceeded the statutory deadline, with delays ranging from a few weeks to over six months in some cases. Clearly, despite notable successes, CAAR still grapples with procedural bottlenecks that demand urgent attention.

One major cause for these delays, we found, is CAAR’s procedural dependence on receiving inputs from port commissioners. CAAR officers typically await feedback from jurisdictional commissioners before proceeding with rulings, often resulting in substantial delays. Stakeholder interviews revealed that port commissioners frequently missed their two-week response deadline stipulated under Regulation 8(7) of the CAAR Regulations, 2021. Some CAAR officers indicated having to send repeated reminders or even escalate matters through demi-official letters, consuming valuable administrative bandwidth and prolonging timelines unnecessarily.

The study’s data further highlights significant disparities in performance among CAAR officers. For instance, while one officer achieved an impressive 86.1% compliance rate within the statutory timeline, another officer managed compliance in only 2.2% of cases. Such unevenness strongly indicates that procedural clarity, rather than the mere addition of more benches, holds the key to substantial improvement.

Given these realities, an ambitious yet feasible target for CAAR could be to reduce the statutory timeline from the current 90 days to just 30 days. The paper strongly supports such a reset, emphasising that with targeted process re-engineering, this target is achievable. Indeed, other jurisdictions like Canada and Australia already demonstrate faster turnaround times by maintaining dedicated technical units, thereby eliminating delays from external dependencies.

Specifically, the report advocates establishing a specialised, in-house Technical Unit within CAAR itself, staffed with experts in classification and valuation. Currently, CAAR lacks institutionalised research support, compelling officers to rely heavily on external inputs, which are often slow or incomplete. According to the report’s findings, jurisdictions such as the US, Canada, and Australia benefit significantly from internal expertise that enables rulings to be issued swiftly, efficiently, and consistently.

The Technical Unit could provide CAAR officers with structured technical inputs within a week, entirely eliminating the current prolonged waiting period for external inputs. Data from the study clearly indicates that such delays substantially impact CAAR’s overall efficiency, with nearly 33% of rulings delayed by 91–180 days, primarily awaiting commissioner responses. By internalising this expertise, CAAR could drastically improve its timelines without requiring new benches.

Moreover, enhancing CAAR’s existing digital systems could further accelerate timelines significantly. The study recommends deploying digital process optimisation tools such as AI-driven case management and drafting support—not to automate substantive decision-making, but to streamline administrative tasks. Such digital tools, as supported by the study, would substantially reduce time spent on manual drafting and record-keeping, enabling officers to prioritise decision-making rather than administrative chores.

In addition, improved transparency and performance tracking are essential. The study highlights a crucial need for CAAR to publicly disclose procedural details such as the number of days port commissioners take to submit comments, the frequency of extensions, and officer-specific performance metrics. Such transparency would not only enhance public confidence but also set clearer expectations and drive internal accountability.

The case for a rapid move to CAAR 2.0 is compelling. The current performance rate of approximately 46% adherence to the 90-day timeline can and must be significantly improved. International comparisons illustrate that a well-equipped and internally supported CAAR could feasibly deliver rulings not in months, but in weeks, thus greatly enhancing predictability and efficiency in India’s trade ecosystem.

In conclusion, the government has already taken a substantial step forward with the successful transformation from AAR to CAAR. The results have been genuinely positive. Yet, with focused procedural reforms, the government can realistically aim higher—delivering advance rulings in just 30 days. This shift, achieved through smarter administrative procedures and process re-engineering, will firmly establish India as a global leader in customs administration. It’s time for CAAR 2.0—faster, smarter, and even more business-friendly.

(Prashant Narang is Deputy Program Director at the TrustBridge Rule of Law Foundation.)

Views are personal, and do not represent the stand of this publication.