Redemption of advance authorisations affected by Rule 96(10)

Clarification on Redemption of Advance Authorisations impacted by erstwhile Rule 96(10) of the CGST Rules, 2017 and Imports effected between 13.10.2017 to 09.01.2019 – regarding

1. Background:
   It has come to the notice of this Directorate that certain exporters are facing difficulties in obtaining redemption of Advance Authorisations (AAs) impacted by the erstwhile provisions of Rule 96(10) of the CGST Rules, 2017. Prior to its amendment, Rule 96(10) restricted refund of IGST paid on exports in cases where the exporter or its supplier had availed certain duty exemptions—such as those under Customs Notification No. 79/2017-Customs—for imports made between 13 October 2017 and 9 January 2019.
   
2. Relevant Notifications:
   • Pursuant to Customs Notification No. 79/2017-Customs dated 13.10.2017, DGFT issued Notification No. 33/2015-2020 on the same date, modifying Para 4.14 of the FTP 2015-20. This extended exemption from payment of all duties, including IGST and Compensation Cess, for physical exports under the AA Scheme, subject to the pre-import condition.
   • Later, with the issuance of Customs Notification No. 01/2019-Customs dated 10.01.2019, the pre-import condition was withdrawn through DGFT Notification No. 53/2015-2020 dated 10.01.2019, thereby allowing IGST and Compensation Cess exemption under the AA Scheme without such requirement.
     
3. Judicial and Departmental Directions:
   The Hon’ble Supreme Court, in its judgment dated 28 April 2023, directed that affected parties be allowed refund or ITC wherever admissible. Subsequently, Customs Circular No. 16/2023-Customs dated 07.06.2023 and DGFT Trade Notices No. 07/2023-24 (08.06.2023) and No. 27/2023 (25.09.2023) were issued in this regard.
   
4. Clarification:
   In continuation of the above, it is hereby clarified that Export Obligation Discharge Certificates (EODCs) shall not be withheld, provided all other requirements under the Advance Authorisation Scheme are duly fulfilled, in the following cases: i. IGST Paid in Cash: Where IGST was paid in cash at the time of import clearance under the AA Scheme during the period 13.10.2017 to 09.01.2019.
   ii. Non-Availment of Duty Exemptions: Where the importer did not avail exemption from IGST, Compensation Cess, or other levies (except Basic Customs Duty).
   iii. Compliance with Pre-import Condition: Where the importer has complied with the prescribed pre-import and other procedural requirements under the Scheme.

This issues with the approval of the Director General of Foreign Trade.

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