DGFT Clarifies Redemption of Advance Authorisations under Rule 96(10).

The Directorate General of Foreign Trade (DGFT) has issued a clarification addressing long-pending challenges faced by exporters in securing redemption of Advance Authorisations (AAs) impacted by the earlier provisions of Rule 96(10) of the CGST Rules, 2017. This move aims to streamline policy implementation and provide much-needed clarity to exporters affected during the transitional phase between October 2017 and January 2019. 

Background

Rule 96(10) of the CGST Rules, before its amendment, restricted the refund of IGST paid on exports in cases where the exporter or their supplier had availed specific duty exemptions — notably under Customs Notification No. 79/2017-Customs, applicable to imports made from 13th October 2017 to 9th January 2019.

Following the issuance of Customs Notification No. 79/2017-Customs, DGFT amended Para 4.14 of the Foreign Trade Policy (FTP) 2015–2020 through Notification No. 33/2015–2020 dated 13th October 2017, allowing exemption from all duties, including IGST and Compensation Cess, under the Advance Authorisation Scheme, subject to the pre-import condition.

However, this condition was later withdrawn through Customs Notification No. 01/2019-Customs and DGFT Notification No. 53/2015–2020, both dated 10th January 2019, thereby allowing IGST exemption without the pre-import restriction.

Judicial and Policy Developments

The issue reached finality with the Hon’ble Supreme Court’s judgment dated 28th April 2023, which upheld the Revenue’s appeal but directed authorities to permit affected exporters to claim refund or Input Tax Credit (ITC) wherever admissible.

In response, the Customs Department issued Circular No. 16/2023-Customs dated 7th June 2023, followed by DGFT Trade Notice No. 07/2023-24 dated 8th June 2023 and Trade Notice No. 27/2023 dated 25th September 2023, to ensure uniform implementation of the Court’s directions.

DGFT Clarification – EODC to Be Granted in Specific Cases

In continuation of these measures, DGFT has now clarified that the Export Obligation Discharge Certificate (EODC) shall not be withheld for exporters who meet the specified conditions and have otherwise fulfilled all other obligations under the AA Scheme.

✅ Eligible Cases for EODC Redemption

1. Payment of IGST in Cash:

• Where IGST was paid in cash at the time of import clearance under the AA Scheme during 13th October 2017 – 9th January 2019.

2. Non-Availing of Duty Exemptions:

• Where the exporter did not avail exemption from IGST, Compensation Cess, or any other levies (except Basic Customs Duty).

3. Compliance with Pre-Import Condition:

• Where the exporter has complied with the pre-import condition and fulfilled all prescribed procedural requirements under the AA Scheme.

Impact and Relief for Exporters

This policy clarification provides regulatory relief and procedural clarity for exporters whose AAs were delayed or withheld due to the transitional impact of Rule 96(10).Exporters whose AAs were impacted by the erstwhile Rule 96(10) can now obtain EODC redemption without delay, if the above conditions are satisfied.

• Exporters fulfilling the above criteria can now obtain EODC without procedural delays.
• The circular ensures alignment across DGFT and Customs authorities, minimizing litigation and compliance ambiguity.
• It reinforces the government’s commitment to trade facilitation and addressing exporters’ concerns in line with judicial directives.

Notification Reference:  DGFT
Policy Circular No. 07/2025-26
11 /11 /2025