The Central Board of Indirect Taxes and Customs (CBIC) has issued a significant clarification on the manner of granting duty drawback under Section 74 and refunds under Section 27 of the Customs Act, 1962, in cases where import duty was paid wholly or partly through Duty Credit Scrips.
The clarification aims to ensure uniform implementation across Customs formations and eliminate inconsistent practices that have created uncertainty for importers and exporters.
The clarification has been issued through Circular No. 30/2026-Customs dated July 3, 2026, following representations received from trade and industry regarding the treatment of drawback and refund claims where customs duties had been discharged using Duty Credit Scrips.
According to the CBIC, field formations had been following different approaches while processing such claims. In some cases, Customs authorities were granting drawback or refund amounts in cash, whereas others were re-crediting the amount into the duty credit scrips or issuing re-credit certificates.
The issue also came under scrutiny in Paragraph 5.3 of the Comptroller and Auditor General (C&AG) Report No. 33 of 2025 on the Duty Drawback Scheme, which observed instances where drawback under Section 74 had been incorrectly paid in cash despite the Basic Customs Duty (BCD) having originally been discharged through Duty Credit Scrips.
After examining the matter, the CBIC has clarified that wherever customs duty was paid through Duty Credit Scrips at the time of import, any subsequent drawback under Section 74 or refund under Section 27 of the Customs Act must be granted through re-credit and not through cash payment.
The Board stated that this principle would apply irrespective of whether the duty was paid wholly or partly through such scrips, thereby ensuring that the benefit is restored in the same form in which the duty was originally discharged.
For imports where duty was paid using RoDTEP or RoSCTL duty credit scrips, the CBIC has directed that the admissible drawback or refund shall be credited directly into the electronic credit ledger of the Importer Exporter Code (IEC) holder.
The re-credited balance can subsequently be used for generation of fresh electronic scrips, which may be utilized in accordance with the procedure prescribed under Notification No. 75/2021-Customs (N.T.) dated September 23, 2021.
To facilitate implementation of the revised procedure, the Directorate General of Systems is developing the necessary functionality in the Customs Automated System (CAS). CBIC has stated that a detailed operational advisory will be issued once the module is completed and made operational.
The circular also addresses cases involving discontinued export promotion schemes such as MEIS and SEIS, where electronic re-credit of duty credit scrips is no longer feasible.
The customs department has been instructed to issue a re-credit certificate containing details of the duty credit scrip used, the date of import of the subsequently re-exported goods, and the amount debited at the time of import. The certificate will enable importers to seek revalidation of the duty credit scrip from the Directorate General of Foreign Trade (DGFT).
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