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Category: DGFT

  • Advocate Ravi Shekhar Jha conducts a corporate Masterclass for Syngenta India on FTAs, CAROTAR 2020, Customs compliance, Rules of Origin, RoDTEP, export incentives and Foreign Trade Policy

    Advocate Ravi Shekhar Jha conducts a corporate Masterclass for Syngenta India on FTAs, CAROTAR 2020, Customs compliance, Rules of Origin, RoDTEP, export incentives and Foreign Trade Policy

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 31.08.2026

    Advocate Ravi Shekhar Jha conducts a corporate Masterclass for Syngenta India on FTAs, CAROTAR 2020, Customs compliance, Rules of Origin, RoDTEP, export incentives and Foreign Trade Policy

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    From Trade Benefits to Trade Readiness β€” Compliance Must Come First

    It was a privilege to conduct an intensive Masterclass on Free Trade Agreements (FTAs), Customs Compliance, RoDTEP and Export Incentives for the Syngenta India team at its Pune headquarters, with professionals participating across functions and geographies.

    The programme focused on an increasingly important reality of international trade: trade benefits can be effectively realised only when they are supported by strong regulatory compliance, documentation and internal controls.

    The session brought together professionals from Trade Compliance & Customs, R&D, Logistics, GST, Trade Finance and Procurement, resulting in highly engaging discussions around the practical application of Customs law, Foreign Trade Policy and FTA requirements.

    From FTA Benefits to Compliance Readiness

    A major focus of the programme was the effective utilisation of preferential tariff benefits under India’s Free Trade Agreements.

    FTA benefits are not simply about claiming a lower rate of Customs duty. Businesses must consider the complete compliance framework surrounding the transaction, including:

    • correct tariff classification;
    • applicable Rules of Origin and Product Specific Rules (PSR);
    • origin documentation and supporting records;
    • importer due diligence;
    • valuation and Customs compliance; and
    • preparedness for subsequent verification by Customs authorities.

    The discussions also examined Section 28DA of the Customs Act, 1962 and CAROTAR 2020, including the importer’s responsibility to exercise reasonable care and maintain sufficient information to substantiate the origin criteria applicable to preferential imports.

    The underlying message was clear: a proof/certificate of origin should form part of a wider origin-compliance framework rather than being treated as the sole basis for an FTA claim.

    Classification, Valuation and Origin: Connected Compliance Controls

    Another important theme was the relationship between tariff classification, Customs valuation and origin. Although these are legally distinct concepts, they frequently interact in determining the ultimate Customs duty exposure, availability of preferential tariff treatment and overall transaction risk.

    Businesses therefore need to examine these issues before imports are undertaken, rather than addressing them only when a query is raised during Customs assessment or a subsequent audit or investigation.

    RoDTEP & Export Incentives

    The programme also covered RoDTEP and India’s export remission and incentive framework, with emphasis on evaluating benefits strategically. Exporters should assess eligibility, notified rates, documentation requirements, product classification and applicable conditions before structuring their claims.

    The objective should not merely be to identify available benefits, but to establish processes capable of supporting those benefits during subsequent regulatory scrutiny.

    Compliance Should Begin Before the Transaction

    Perhaps the most important takeaway from the Masterclass was simple:

    Compliance should begin before the transaction β€” not after Customs raises a query.

    Effective trade compliance requires coordination between law, policy and actual business operations. Procurement, logistics, finance, taxation, R&D and trade-compliance teams therefore need to work together rather than treating Customs and FTA compliance as isolated functions.

    The quality of participation, practical questions and cross-functional discussions from the Syngenta India team made the programme particularly rewarding. My sincere appreciation to the entire participating team for investing in continuous capability development and for the thoughtful and highly engaging discussions throughout the programme.

    Customised Corporate Trade Compliance Programmes

    Through Aadrikaa Legal Services, customised executive workshops, corporate training and advisory programmes can be structured for MNCs, manufacturers, importers, exporters and trade-compliance teams covering

    a. FTA , CAROTAR 2020 & Section 28DA

    b. RoDTEP & export incentives,

    c. Classification & General Rules of Interpretation  (GRI)

    d. Valuation

    e. DGFT/Foreign Trade Policy- EPCG/Advance License

    f. Customs Special Programmes- SVB, AEO, MOOWR, EMI

    g. PCA preparedness and Customs/DRI risk

    h. trade advisory and pre-litigation support

    i. DGTR trade investigations

    j. Customs & allied regulatory laws (PGAs)

    Secure your operations. Strengthen compliance. Reduce cross-border friction.

    Listen to this on our #YouTube Channel

    Advocate Ravi Shekhar Jha
    Customs | Foreign Trade Policy | FTA | Trade & Regulatory Advisory

    Google Form Link

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    πŸ“§ intelconsul@gmail.com
    βš–οΈ Professional Profile – Advocate Ravi Shekhar Jha

    Knowledge builds compliance. Compliance builds confidence. Confidence enables global trade.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

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  • Delhi High Court Quashes Retrospective Withdrawal of MEIS Benefits for FIBC Exporters

    Delhi High Court Quashes Retrospective Withdrawal of MEIS Benefits for FIBC Exporters

    Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

    Date: 03.07.2026

    Delhi High Court Quashes Retrospective Withdrawal of MEIS Benefits for FIBC Exporters

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Delhi High Court recently delivered a landmark judgment in favor of the Indian Flexible Intermediate Bulk Container Association (FIBC Association), addressing the retrospective withdrawal of export incentives under the Merchandise Exports from India Scheme (MEIS) for FIBC bags. This decision has significant implications for exporters and the broader Indian export policy framework.

    Background: The MEIS Scheme and FIBC Sector

    Flexible Intermediate Bulk Containers (FIBC), commonly known as Jumbo Bags, are a major export product for India, contributing nearly USD 1 billion annually and employing thousands across the country. The MEIS scheme, introduced under the Foreign Trade Policy (FTP) 2015-2020, provided crucial incentives to exporters of FIBC bags, helping India capture a substantial share of the global market.

    The Controversy: Retrospective Withdrawal of Benefits

    On 29th January 2020, the Directorate General of Foreign Trade (DGFT) issued a notification retrospectively withdrawing MEIS benefits for FIBC bags, effective from 7th March 2019. Exporters argued that this sudden and retroactive change caused severe financial losses, as export contracts had been priced with the expectation of receiving MEIS incentives. The FIBC Association challenged the notification, contending that such retrospective withdrawal was arbitrary, unlawful, and unsupported by statutory authority.

    Key Arguments

    Petitioner’s Stand

    1. Unlawful Retrospective Application: The FIBC Association argued that the Foreign Trade (Development and Regulation) Act, 1992, does not empower the government to make retrospective amendments to export policies.
    2. Financial Harm: Exporters had factored MEIS benefits into their pricing, and the retrospective withdrawal led to significant losses.
    3. Lack of Alternative Benefits: The replacement scheme, RoSCTL, offered no benefit (“Nil” rate) to FIBC exporters, leaving them without any support.

    Government’s Defense

    1. Policy Discretion: The government claimed the right to amend or withdraw export incentives in the public interest.
    2. WTO Compliance: The withdrawal was partly in response to World Trade Organisation (WTO) obligations.
    3. Transition to RoSCTL: The government argued that exporters were aware of the transition to the RoSCTL scheme, though FIBC bags received no benefit under it.

    Court’s Analysis and Findings

    The High Court examined the statutory framework and relevant Supreme Court precedents. It found:

    • No Statutory Authority for Retrospective Withdrawal: Section 5 of the FTDR Act, 1992, does not permit retrospective amendments to export policies unless expressly provided by law.
    • Principle of Natural Justice: Retrospective withdrawal of benefits, especially without prior notice, violates principles of fairness and equity.
    • No Double Benefit: Since FIBC bags received no benefit under RoSCTL, the argument of preventing double benefits was unfounded.
    • Arbitrariness and Discrimination: Selectively withdrawing benefits for FIBC bags, while other products continued to receive support, was arbitrary and discriminatory.

    The Judgment: Relief for Exporters

    The Court ruled in favor of the FIBC Association, issuing the following directions:

    1. Prospective Application Only: The notification withdrawing MEIS benefits for FIBC bags will apply only prospectively, not retrospectively.
    2. Processing of Claims: The government must process and grant MEIS benefits for FIBC bag exports made between 7th March 2019 and the date of the notification, provided applications were submitted as per the Court’s interim order.

    Impact and Significance

    This judgment restores crucial export incentives to the FIBC sector for the disputed period, providing much-needed relief to exporters. It also sets an important precedent, reinforcing that government policy changes affecting incentives must not be applied retrospectively without clear legislative backing.

    The decision upholds the principles of fairness and legal certainty in India’s export policy regime.

    Connected Matter

    Delhi High Court Partially Allows Chillies Exporters Association’s Petition Against TMA Scheme Foreclosure

    Source: Delhi High Court

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  • Delhi High Court Clears Imported Goods Blocked by Sudden Policy Change

    Delhi High Court Clears Imported Goods Blocked by Sudden Policy Change

    Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

    Date: 05.06.2026

    Delhi High Court Clears Imported Goods Blocked by Sudden Policy Change

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    M/s Bright Metal Refiners, a New Delhi-based importer of precious metals, faced a sudden hurdle when the Indian government changed the import policy for platinum alloy jewellery. On April 2, 2026, a notification was published in the e-Official Gazette, shifting the import status of certain jewellery from “Free” to “Restricted.” This change meant importers now needed special authorization to clear such goods through customs.

    However, Bright Metal Refiners’ consignments had already been shipped from Bangkok and arrived at Indian airports before the notification was officially published. Customs authorities refused to clear the goods, citing the new restrictions, prompting the company to seek relief from the Delhi High Court.

    The Legal Dispute

    The core issue was whether the new import restrictions could be applied to goods that had already arrived in India before the notification was published. The government argued that since the goods had not been cleared by customs before the notification, the new rules applied. Bright Metal Refiners countered that the relevant date for applying import restrictions is the date of shipment or arrival, not the date of clearance.

    Key Legal Principles Applied

    The Delhi High Court relied on several established legal principles:

    1. Publication Requirement: A notification only becomes enforceable upon its publication in the Official Gazette. Until then, it has no legal effect.
    2. Prospective Operation: Subordinate legislation (like import notifications) cannot operate retrospectively unless the parent statute expressly allows it. In this case, there was no such provision.
    3. Relevant Date for Import: According to the Foreign Trade Policy, the date of shipment/dispatch from the exporting country is the relevant date for determining the applicable import policyβ€”not the date of customs clearance.
    4. Judicial Precedent: The court cited Supreme Court and High Court decisions, including Viraj Impex Pvt. Ltd. v. Union of India and Enero Jewels Pvt. Ltd. v. Union of India, which held that notifications cannot be applied to goods that arrived before their publication.
    5. Ultra Vires Doctrine: Courts can disregard subordinate legislation that is beyond legal authority (ultra vires), even if there is no explicit request to strike it down.
    6. Alternative Remedy Not a Bar: The existence of an alternative remedy (such as approaching a policy relaxation committee) does not prevent the court from granting relief when the notification is inapplicable.

    The Court’s Decision

    The High Court found that Bright Metal Refiners’ goods arrived at Indian ports before the notification was published. Since the notification could not operate retrospectively, the new restrictions did not apply to these consignments. The court directed customs authorities to process and release the goods immediately, ruling in favor of the petitioner.

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    Source: Delhi High Court

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  • Cost of Non-Compliance in Trade Compliance

    Cost of Non-Compliance in Trade Compliance

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 23.03.2026

    Cost of Non-Compliance in Trade Compliance

    Adv Ravi Shekhar Jha
    Adv Ravi Shekhar Jha

    This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email idΒ intelconsul@gmail.com or on his Mobile +91-9999005379.

    Trade compliance is a critical aspect of international business, ensuring adherence to regulations and laws governing the import and export of goods. ​ However, non-compliance can lead to severe consequences, including fines, litigation, reputational damage, operational disruptions, and financial losses. ​ This article delves into the importance of trade compliance, the legal implications of misclassification, and the findings from two empirical surveys on exemption notifications and HSN classification disputes. ​

    Why Choose Trade Companion

    When you use the Trade Companion tool, we ensure accurate and defensible classification outcomesβ€”helping you remain compliant across regulatory frameworks, irrespective of your industry.

    Legal Perspective: Classification-Related Disputes

    Let us examine this from a legal standpoint.

    Short Answer

    Yesβ€”incorrect classification under the Customs Tariff can result in:

    • Demand of differential duty
    • Interest liability
    • Imposition of penalties
    • Confiscation of goods (in serious cases)
    • Prosecution (in cases involving fraud or intent to evade duty)

    However, the extent of consequences depends on whether the error is bona fide or intentional.

    1. Why Classification is Legally Critical

    Classification is the foundation of trade compliance, as it determines:

    • Basic Customs Duty (BCD)
    • Integrated GST (IGST)
    • Anti-dumping duty
    • Safeguard duty
    • Import policy status (Free / Restricted / Prohibited)
    • Applicability of BIS/QCO and other allied regulations
    • Eligibility for exemptions and concessions

    Any error in classification directly impacts duty liability, regulatory obligations, and legal exposure.

    Legal Framework Governing Classification

    Classification under Indian Customs law is governed by:

    • Customs Tariff Act, 1975
    • Customs Act, 1962
    • General Rules for Interpretation (GRI)

    These laws collectively form the backbone of classification principles and compliance obligations.

    Key Takeaway

    Misclassification = Non-compliance.
    But the legal consequences ultimately depend on:

    • Intent
    • Disclosure
    • Conduct

    The Cost of Non-Compliance in Trade Compliance ​

    Non-compliance with trade regulations can have devastating effects on businesses. ​ The repercussions include:

    • Demand for duty payments: Incorrect classification can lead to demands for additional duty payments. ​
    • Interest and penalties: Businesses may face interest charges and penalties for non-compliance. ​
    • Confiscation of goods: In severe cases, goods may be confiscated due to false or incorrect declarations. ​
    • Prosecution: Fraudulent misclassification can result in legal action and prosecution. ​

    Severity of Consequences ​

    The severity of penalties depends on the intent and nature of the misclassification:

    • Bona fide errors: Typically result in duty and interest payments. ​
    • Negligent misclassification: May lead to duty, interest, and penalties. ​
    • Intentional misclassification: Can result in duty, interest, 100% penalty, and confiscation. ​
    • Fraudulent evasion: May lead to duty, penalties, and even prosecution. ​​

    Statutory Provisions Triggered by Misclassification ​

    Section 17 β€” Self-Assessment ​

    Importers are responsible for self-assessing the classification of goods. ​ Errors can lead to re-assessment and duty demands. ​

    Section 28 β€” Demand of Duty ​

    Duty short-paid due to misclassification triggers two scenarios:

    • Bona fide error: Duty and interest are payable within a 2-year time limit. ​
    • Fraud or suppression: Duty, interest, and heavy penalties are imposed within a 5-year time limit. ​

    Section 111(m) β€” Confiscation ​

    Goods are liable for confiscation if declarations are false or incorrect, making misclassification a serious compliance issue. ​

    Section 112 β€” Penalty ​

    Improper importation can result in penalties up to the duty amount or more in cases of fraud. ​

    Section 114A β€” Mandatory Penalty ​

    Fraudulent misclassification involving suppression, willful misstatement, or intent to evade duty results in a penalty equal to 100% of the duty. ​

    Judicial Perspective on Misclassification ​

    Indian courts have consistently emphasized the distinction between bona fide classification disputes and deliberate evasion. ​ Courts recognize that classification often involves technical interpretation, competing headings, HSN notes, and exemption conditions. ​ Mens rea (intent) plays a crucial role in determining the severity of consequences. ​

    When Misclassification Becomes Serious Non-Compliance ​

    Misclassification is treated as a serious violation under certain circumstances, such as:

    1. Ignoring clear tariff headings. ​
    2. Misusing exemption notifications. ​
    3. Hiding product specifications. ​
    4. Changing product descriptions across shipments. ​
    5. Repeated misclassification despite queries. ​
    6. Evasion of import policy (e.g., restricted goods declared as free). ​
    7. Avoidance of BIS/QCO certification or anti-dumping duties. ​

    Empirical Survey Analysis: Exemption Notifications ​

    Overview

    A survey titled β€œEmpirical Data Survey – Exemptions under Section 25 of the Indian Customs Act, 1962” collected responses from 12 trade professionals, including importers, exporters, consultants, and legal practitioners. ​ The survey aimed to understand the practical impact of exemption notifications, litigation trends, compliance burdens, and views on judicial review and reforms. ​

    Key Findings

    1. High litigation exposure: 75% of respondents faced disputes related to exemption notifications. ​
    2. Interpretation disputes dominate: 75% of disputes arise from ambiguous interpretations. ​
    3. Judicial remedies are critical: 58.3% of disputes escalate to High Courts, with 75% of outcomes favorable to businesses. ​
    4. Time-consuming litigation: 33.3% of cases take over three years for resolution.
    5. Business impact: Financial losses, working capital blockage, and supply chain disruptions are common. ​
    6. Excessive discretionary power: 66.7% of respondents believe Section 25 grants excessive power to the government. ​

    Empirical Survey Analysis: HSN Classification Disputes ​

    Overview

    The β€œHSN Classification Empirical Survey” collected responses from 14 professionals to understand challenges in HSN classification, dispute patterns, financial impact, and reform suggestions. ​

    Key Findings

    1. Common disputes: 57.1% of respondents faced classification disputes, primarily related to customs duty rates (64.3%). ​
    2. Knowledge gaps: Awareness of WCO HS explanatory notes is low, despite their importance in classification. ​
    3. Reliance on consultants: 64.3% of respondents rely on consultants or lawyers for dispute resolution. ​
    4. Digital tools are underutilized: Manual processes and online portals dominate, with limited use of integrated digital tools. ​
    5. Financial impact: Classification disputes lead to significant cash flow issues and penalty exposure. ​

    Suggested Reforms

    Legislative Reforms

    • Introduce clear statutory guidelines for classification disputes. ​
    • Strengthen advance ruling mechanisms. ​
    • Mandate explanatory notes for major tariff changes. ​

    Administrative Reforms

    • Develop a national HSN guidance portal. ​
    • Conduct regular training sessions by CBIC and DGFT. ​
    • Harmonize Customs and DGFT classification practices. ​

    Technological Reforms

    • Implement AI-based classification tools. ​
    • Create a single-window digital classification platform. ​
    • Develop a public database of classification rulings. ​

    Conclusion

    Trade compliance is a cornerstone of international business, but non-compliance can lead to severe financial and reputational consequences. ​ Misclassification of goods under the Customs Tariff is a major source of disputes, often driven by ambiguous regulations and knowledge gaps. ​ Empirical surveys highlight the need for legislative, administrative, and technological reforms to reduce disputes, improve compliance, and safeguard businesses from financial risks. ​ Judicial review remains a critical mechanism to ensure fairness and accountability in trade compliance.

    For Trainings/Workshops/Consulting/Litigation Support Please connect with – Ravi Shekhar Jha intelconsul@gmail.com +91-9999005379

    For Product Access Please connect with – Sidharth Yadav sidharth_08@yahoo.com +91-9980493690

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  • The Issue of Pre-Import Condition under Advance Authorization Scheme

    The Issue of Pre-Import Condition under Advance Authorization Scheme

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 14.12.2025

    The Issue of Pre-Import Condition under Advance Authorization Scheme

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

    The “pre-import condition” under the Advance Authorization Scheme has been a significant issue for exporters, particularly for imports made between October 13, 2017, and January 9, 2019. ​ This condition required that goods be imported first and then used for manufacturing export goods, which created operational challenges for exporters. ​ The condition was introduced to regulate exemptions from Integrated Goods and Services Tax (IGST) and GST Compensation Cess under the scheme. ​

    Legal Framework Governing the Issue

    1. Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act):

    • The FTDR Act, 1992 provides the legal foundation for the formulation and implementation of the Foreign Trade Policy (FTP). ​
    • Section 5 of the FTDR Act empowers the Central Government to formulate and amend the FTP to regulate imports and exports. ​
    • The Advance Authorization Scheme is governed under Chapter IV of the FTP, which is framed under the FTDR Act.

    2. Customs Act, 1962:

    • The Customs Act, 1962 governs the levy and collection of customs duties on imports and exports. ​
    • Section 25(1) of the Customs Act empowers the Central Government to issue exemption notifications for customs duties. ​

    3. Customs Notification No. ​ 18/2015-Customs (April 1, 2015):

    • This notification exempted goods imported under Advance Authorization from various duties, including Basic Customs Duty (BCD), Additional Customs Duty, Anti-Dumping Duty, and others. ​

    4. Customs Notification No. ​ 79/2017-Customs (October 13, 2017):

    • This notification amended Notification No. ​ 18/2015-Customs to include exemptions for IGST and GST Compensation Cess, subject to the fulfillment of the pre-import condition. ​
    • Two key conditions were introduced:
      • Exemption from IGST and Compensation Cess was applicable only for physical exports. ​
      • The exemption was subject to the pre-import condition, meaning goods had to be imported first and then used for manufacturing export goods.

    5. Customs Circular No. ​ 16/2023:

    • Issued in compliance with the Supreme Court’s judgment, this circular provides a procedure for regularizing imports that failed to meet the ‘pre-import condition’ during the specified period. ​ It allows importers to pay IGST and Compensation Cess along with applicable interest and claim refunds or ITC, subject to eligibility under GST laws.

     β€‹

    6. Foreign Trade Policy (FTP) 2023:

    • Paragraph 4.03: Governs the Advance Authorization Scheme, allowing duty-free import of inputs physically incorporated into export products. ​
    • Paragraph 4.13: Empowers the Director General of Foreign Trade (DGFT) to impose pre-import conditions for specific inputs. ​
    • Paragraph 4.14: Lists the duties exempted under the Advance Authorization Scheme, including IGST and Compensation Cess, subject to the pre-import condition. ​
    • Paragraph 4.27: Permits exports in anticipation of authorization, allowing exporters to export goods before importing inputs under Advance Authorization. ​

    7. Handbook of Procedures (HBP) 2023:

    • Paragraph 4.27(d): States that duty-free authorizations for inputs subject to pre-import conditions cannot be issued. ​
    • Appendix 4J: Lists specific inputs subject to pre-import conditions and their export obligation periods. ​

    Supreme Court Judgment (April 28, 2023):

    The Supreme Court upheld the Revenue’s appeal, ruling that the pre-import condition was valid and not arbitrary or unreasonable. Key points from the judgment include:

    1. Legality of Pre-Import Condition:
      • The pre-import condition was within the powers of the DGFT under Paragraph 4.13(i) of the FTP and Section 5 of the FTDR Act.
      • The condition was introduced to align the Advance Authorization Scheme with the GST regime, which aimed to create a unified tax structure.
    2. Impact of GST:
      • The GST regime introduced IGST and Compensation Cess, which were not part of the original Notification No. ​ 18/2015-Customs. The pre-import condition was introduced to ensure compliance with the new tax framework.
    3. Hardship to Exporters:
      • The court acknowledged the operational challenges faced by exporters due to the pre-import condition but emphasized that inconvenience does not render a policy arbitrary or unconstitutional. ​
    4. Legislative Intent:
      • The court recognized the legislative intent behind the pre-import condition as part of broader fiscal reforms under GST. ​

    How DGFT Clarifications Helped Address Discrepancies

    The Directorate General of Foreign Trade (DGFT) issued several clarifications and circulars to address the challenges and discrepancies arising from the pre-import condition:

    1. Trade Notice No. ​ 07/2023-24 (June 8, 2023):

    • In compliance with the Supreme Court judgment, this notice informed exporters that imports made under the Advance Authorization Scheme between October 13, 2017, and January 9, 2019, which could not meet the pre-import condition, may be regularized by making payments as prescribed in Customs Circular No. ​ 16/2023 (dated June 7, 2023). ​
    • Regional Authorities were instructed to guide exporters on the regularization process. ​

    2. Trade Notice No. ​ 27/2023 (September 25, 2023):

    • Provided detailed clarifications for specific scenarios:
      • Imports after January 10, 2019: Not subject to the pre-import condition. ​
      • Imports under Advance Authorization on payment of IGST and Compensation Cess: Not subject to the pre-import condition, irrespective of the date of import. ​
      • Partially completed imports: Imports made after January 10, 2019, are not subject to the pre-import condition, even if some imports were made before this date. ​

    3. Policy Circular No. ​ 07/2025-26 (November 11, 2025):

    • Clarified that the Export Obligation Discharge Certificate (EODC) shall not be withheld if all other requirements are fulfilled in the following cases:
      • IGST paid in cash during the specified period. ​
      • Non-availing of duty exemptions for IGST, Compensation Cess, or other levies (except Basic Customs Duty). ​
      • Compliance with pre-import condition and other procedural requirements under the scheme. ​

    Addressing Deficiencies in Advance Authorization Applications ​

    For exporters facing deficiencies due to non-compliance with the pre-import condition, the following steps can be taken:

    1. Regularization of Imports:

    • As per Trade Notice No. ​ 07/2023-24, imports made between October 13, 2017, and January 9, 2019, which did not meet the pre-import condition, can be regularized by paying the applicable duties and interest to the Customs Authority. ​
    • Exporters should approach the jurisdictional Customs Authority with the required documentation and make the necessary payments. ​

    2. **Claim Refund or Input Tax Credit ​

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    Source: Supreme Court, DGFT, CBIC

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  • Delhi High Court Partially Allows Chillies Exporters Association’s Petition Against TMA Scheme Foreclosure

    Delhi High Court Partially Allows Chillies Exporters Association’s Petition Against TMA Scheme Foreclosure

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 13.12.2025

    Delhi High Court Partially Allows Chillies Exporters Association’s Petition Against TMA Scheme Foreclosure

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

    In a significant judgment delivered on December 10, 2025, the Delhi High Court partially ruled in favor of the Chillies Exporters Association India in their petition challenging the foreclosure of the “Revised Transport and Marketing Assistance (TMA) for Specified Agricultural Products” scheme. ​ The case, W.P. ​(C) 9463/2024, revolved around the retrospective withdrawal of export incentives under the TMA Scheme by the Directorate General of Foreign Trade (DGFT).

    Background of the Case ​

    The TMA Scheme was introduced by the Government of India in February 2019 to provide assistance for the international transportation and marketing of specified agricultural products. ​ The scheme aimed to mitigate the higher costs of transportation and promote brand recognition for Indian agricultural products in overseas markets. ​ Initially, the scheme was applicable for exports from March 1, 2019, to March 31, 2020, and was later extended until March 31, 2021.

    In September 2021, the government issued a revised TMA Scheme notification, making it applicable retrospectively for exports from April 1, 2021, to March 31, 2022. ​ However, this notification was withdrawn on March 25, 2022, effectively foreclosing the scheme. ​ The Chillies Exporters Association India challenged the retrospective withdrawal, arguing that it unfairly denied exporters the incentives they were entitled to under the scheme. ​

    Key Arguments

    The petitioners contended that the notification dated March 25, 2022, was ultra vires as it retrospectively rescinded the benefits of the TMA Scheme, which had been operational from April 1, 2021, to March 31, 2022. ​ They argued that the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act), under which the scheme was introduced, does not empower the government to issue notifications with retrospective effect. ​ The petitioners also invoked the principle of legitimate expectation, stating that exporters had relied on the scheme to make business decisions and that the retrospective withdrawal of benefits was arbitrary and unfair.

    The respondents, represented by the DGFT, argued that the notification was issued to revamp and redesign the scheme for better outcomes. They emphasized that the government has the authority to amend or rescind policies in the public interest, especially in complex economic matters, and that such decisions should not be subject to judicial review unless malice or arbitrariness is established. ​

    The Court’s Decision

    The Delhi High Court ruled that the government does not have the authority under Sections 3 and 5 of the FTDR Act to issue notifications with retrospective effect. ​ The court held that the notification dated September 9, 2021, which introduced the revised TMA Scheme, could only operate prospectively. Therefore, the court concluded that chilli exporters who made exports between September 9, 2021, and March 24, 2022, are eligible to claim incentives under the scheme, provided they meet the eligibility criteria. ​

    However, the court also ruled that no rights had accrued to chilli exporters for exports made between April 1, 2021, and September 8, 2021, as the scheme was not in operation during that period. ​ The retrospective application of the September 9, 2021, notification was deemed impermissible under the FTDR Act. ​

    Implications of the Judgment

    This judgment is a landmark decision in the realm of foreign trade policy and government schemes. It reinforces the principle that delegated or subordinate legislation cannot have retrospective effect unless explicitly authorized by the governing statute. ​ The ruling also highlights the importance of the principle of legitimate expectation, emphasizing that public authorities must act in a consistent, transparent, and predictable manner. ​

    For chilli exporters, the judgment provides partial relief, allowing them to claim incentives for exports made between September 9, 2021, and March 24, 2022. ​ However, it also underscores the limitations of retrospective policy changes, which can disrupt business planning and create uncertainty for exporters. ​

    Conclusion

    The Delhi High Court’s decision in W.P. ​(C) 9463/2024 serves as a reminder of the legal boundaries within which government policies must operate. While the government has the right to amend or rescind policies in the public interest, such actions must comply with statutory provisions and cannot infringe upon the legitimate expectations of stakeholders. This case is a significant development for exporters and policymakers alike, setting a precedent for the treatment of retrospective policy changes in India’s foreign trade framework. ​

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    Source: Delhi High Court

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  • DGFT issues Clarification on Redemption of Advance Authorisations Impacted by Rule 96(10) of CGST Rules in context to the Supreme Court judgement

    DGFT issues Clarification on Redemption of Advance Authorisations Impacted by Rule 96(10) of CGST Rules in context to the Supreme Court judgement

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 12.11.2025

    DGFT issues Clarification on Redemption of Advance Authorisations Impacted by Rule 96(10) of CGST Rules in context to the Supreme Court judgement

    This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce & Industry, Government of India, has issued Policy Circular No. ​ 07/2025-26 dated November 11, 2025, addressing concerns related to the redemption of Advance Authorisations (AAs) impacted by the erstwhile Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017. This circular provides much-needed clarity for exporters and trade members who faced challenges due to the earlier provisions of Rule 96(10) and its implications on imports made between October 13, 2017, and January 9, 2019. ​

    Background

    Rule 96(10) of the CGST Rules, prior to its amendment, restricted the refund of IGST paid on exports in cases where exporters or their suppliers availed specified duty exemptions under Customs Notification No. ​ 79/2017-Customs. This created hurdles for exporters seeking redemption of their Advance Authorisations during the specified period. ​

    To address these issues, the DGFT had earlier issued Notification No. 33/2015-2020 on October 13, 2017, modifying Para 4.14 of the Foreign Trade Policy (FTP) 2015-2020. ​ This notification extended exemptions from payment of duties, including IGST and Compensation Cess, for physical exports under the AA Scheme, subject to a pre-import condition. ​ However, the pre-import condition was later withdrawn through DGFT Notification No. ​ 53/2015-2020 on January 10, 2019, following the issuance of Customs Notification No. ​ 01/2019-Customs.

    Supreme Court Judgment and Subsequent Actions

    Union of India & ORS.  ​vs Cosmo Films Limited

    The Supreme Court of India set aside the Gujarat High Court’s judgment, which had declared the ‘pre-import condition’ in the Foreign Trade Policy (FTP) and customs notifications as arbitrary and unreasonable. The court upheld the validity of the ‘pre-import condition’ introduced by Notification No. 79/2017-Customs and Notification No. ​ 33/2015-2020, stating that it was within legislative discretion and not arbitrary. It emphasized that tax exemptions and refunds are statutory privileges, not constitutional rights, and that economic policies can involve phased implementation and experimentation. The court also ruled that the removal of the ‘pre-import condition’ through a later notification could not be applied retrospectively. ​ While allowing the Revenue’s appeals, the court directed the respondents (exporters) to claim refunds or input tax credit for duties paid during the interim period, subject to verification by the jurisdictional commissioner. ​

    The Hon’ble Supreme Court, in its judgment dated April 28, 2023, upheld the Revenue’s appeal and directed that affected parties be allowed to claim refunds or input tax credit (ITC) wherever applicable. ​ In response, the Customs Authorities issued Circular No. ​ 16/2023-Customs on June 7, 2023, and the DGFT followed suit with Trade Notices No. ​ 07/2023-24 and No. ​ 27/2023, issued on June 8, 2023, and September 25, 2023, respectively. ​

    Key Clarifications in Policy Circular No. ​ 07/2025-26

    To further streamline the process and address exporters’ concerns, the DGFT has clarified the following points regarding the issuance of Export Obligation Discharge Certificates (EODC):

    1. Payment of IGST in Cash: Exporters who paid IGST in cash at the time of clearing import consignments under the AA Scheme during the specified period will not face any hindrance in obtaining their EODC, provided all other requirements are met. ​
    2. Non-Availing of Duty Exemptions: Exporters who did not avail exemptions from IGST, Compensation Cess, or other levies (except Basic Customs Duty) are eligible for EODC issuance. ​
    3. Compliance with Pre-Import Conditions: Exporters who adhered to the prescribed pre-import and other procedural requirements under the AA Scheme will not face delays in EODC issuance. ​

    Conclusion

    This clarification by the DGFT is a welcome move for exporters who were impacted by the earlier provisions of Rule 96(10) of the CGST Rules. ​ By addressing the concerns and providing clear guidelines, the government has ensured smoother processes for the redemption of Advance Authorisations. Exporters are encouraged to review the circular and ensure compliance with the outlined conditions to facilitate the timely issuance of their EODCs.

    Source: DGFT, Supreme Court

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