DGFT Clarifies Conditions where EODC shall not be Withheld for Advance Authorisation Holders [Read Circular]
DGFT has clarified that EODC must not be denied in specific cases involving imports made between 13 October 2017 and 9 January 2019 under the Advance Authorisation Scheme
DGFT
DGFT
The Directorate General of Foreign Trade ( DGFT ) has issued a new Policy Circular, clarifying the circumstances in which Regional Authorities shall not withhold the Export Obligation Discharge Certificate (EODC) for Advance Authorisation (AA) holders whose imports were impacted by the erstwhile restrictions under Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017.
The clarification was issued by the Directorate following longstanding difficulties faced by exporters seeking redemption of AAs for import consignments cleared during the period from 13 October 2017 to 9 January 2019.
The issue arose primarily due to the interplay between Customs Notification No. 79/2017-Customs dated 13 October 2017 and the now-withdrawn pre-import condition under the Advance Authorisation Scheme.
At the time, DGFT had amended Para 4.14 of the Foreign Trade Policy (FTP) 2015-20 to allow exemption from all duties, including IGST and Compensation Cess, subject to pre-import requirements.
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However, Customs Notification No. 01/2019-Customs and DGFT Notification No. 53/2015-2020 issued on 10 January 2019 formally withdrew the pre-import conditions, allowing exemption from IGST and Compensation Cess under the AA Scheme without prior import requirements.
The DGFT has stated that continued uncertainty regarding eligibility for IGST refunds and the effect of availing duty exemptions persisted until the Supreme Court’s judgment dated 28 April 2023, wherein it was directed that affected parties must be permitted to claim refunds or input tax credit wherever lawfully admissible.
Following this, Customs authorities issued Circular No. 16/2023-Customs on 7 June 2023, and DGFT followed with Trade Notices in June and September 2023.
In continuation of the above, DGFT has clarified the situations in which the Export Obligation Discharge Certificate (EODC) shall not be withheld, provided all other requirements are duly fulfilled, in the following cases:
- Payment of IGST in Cash: Where IGST has been paid in cash at the time of clearance of import consignments under the AA Scheme during the period October 13, 2017 to January 09, 2019.
- Non-Availing of Duty Exemptions: Where the applicant has not availed exemption from IGST, Compensation Cess, or other levies (except Basic Customs Duty).
- Compliance with Pre-Import Condition: Where the applicant has complied with the prescribed pre-import and other procedural requirements under the Scheme.
The circular, undersigned by Saurabh Goyal, Deputy Director General of Foreign Trade provides long-awaited relief to exporters whose authorisations had remained pending for redemption due to procedural ambiguities arising from the past GST-linked restrictions.
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