Policy Circular No. 07/2025-26, Dated 11-11-2025
1. Background
The Directorate General of Foreign Trade (DGFT) has issued a Policy Circular providing clarity on the procedure for redemption of Advance Authorisations impacted by the erstwhile Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017.
The clarification pertains to imports made between 13 October 2017 and 9 January 2019, a period during which exporters faced procedural challenges due to restrictions on refund of IGST for certain duty-exempt imports.
2. Context – Restrictions and Pre-import Conditions
During the specified period:
- Rule 96(10) restricted the refund of IGST on exports when duty exemptions under certain schemes, including Advance Authorisation, were availed.
- The pre-import condition was introduced through earlier notifications, mandating that inputs be imported prior to export to avail IGST and Compensation Cess exemptions under the Advance Authorisation Scheme.
- This condition was subsequently withdrawn, leading to ambiguity in the redemption process for affected authorisations.
3. Purpose of the Circular
The DGFT circular seeks to:
- Resolve difficulties faced by exporters in obtaining redemption of authorisations during this transitional period, and
- Ensure a consistent approach across regional authorities for processing such cases.
4. Clarification Provided
The circular clearly states that Export Obligation Discharge Certificates (EODCs) shall not be withheld if the following conditions are satisfied:
- IGST was paid in cash at the time of import;
- No exemption from IGST, Compensation Cess, or any other levies (except Basic Customs Duty) was availed; and
- The applicant complied with the prescribed pre-import and procedural requirements under the Advance Authorisation Scheme.
5. Significance
This clarification provides long-awaited relief to exporters whose authorisations were pending redemption due to technical restrictions under the erstwhile Rule 96(10).
It reinforces DGFT’s intent to streamline trade facilitation, ensure regulatory certainty, and support exporters’ compliance continuity under the Foreign Trade Policy framework.
