The Central Board of Indirect Taxes & Customs (CBIC), Ministry of Finance, has issued Instruction No. 07/2026-Customs dated June 02, 2026, through its Drawback Division, to all Principal Chief Commissioners/Chief Commissioners and Principal Commissioners/Commissioners of Customs/Customs (Preventive)/Customs & Central Tax and all Principal Director Generals/Director Generals under CBIC. The instruction is addressed to streamline the mechanism by which Customs field formations seek clarification on the interpretation of Foreign Trade Policy (FTP) provisions and related policy conditions from the Directorate General of Foreign Trade (DGFT).
Background and Issue Identified:
The CBIC received a reference from DGFT highlighting that Customs field formations have, in certain instances, been directly corresponding with DGFT Headquarters and DGFT Regional Authorities seeking case-specific clarifications on the interpretation of FTP provisions and policy conditions. The Board examined the matter and observed that such parallel and case-specific references may result in:
- Divergent practices and inconsistent interpretations across different Customs jurisdictions;
- Delays in assessment and clearance of import/export consignments; and
- Avoidable inconvenience to the trade and industry.
Instructions Issued — Five-Point Protocol for Strict Compliance:
In order to ensure institutional consistency, uniformity in implementation of FTP provisions, and expeditious resolution of interpretational issues, the following instructions have been issued for strict compliance by all Customs field formations:
Instruction (i) — Prohibition on Direct Correspondence with DGFT:
Field formations shall not directly correspond with DGFT Headquarters or DGFT Regional Authorities for seeking clarification or interpretation of FTP provisions or policy conditions.
Instruction (ii) — Mandatory Commissionerate/Zonal-Level Examination First:
Interpretational issues arising at the field level shall first be examined at the Commissionerate/Zonal level. Only those issues which require policy-level clarification — after due examination at the zonal level — may be referred to the Board by the Principal Chief Commissioner/Chief Commissioner of the concerned Zone.
Instruction (iii) — Commodity-Specific Issues to Route through National Assessment Centre (NAC):
Commodity-specific issues requiring clarification on interpretation of FTP provisions or policy conditions shall be referred to the Board only after examination and approval by the concerned National Assessment Centre (NAC).
Instruction (iv) — Mandatory Contents of Every Reference to the Board:
Every reference sent to the Board shall invariably contain all of the following information:
- A brief statement of facts (concise summary);
- Relevant FTP provision(s) under question;
- The field formation’s own interpretation/understanding of the concerned policy provision;
- Specific point(s) requiring clarification;
- Indication of the number of cases (tentative) which are being affected due to such interpretation;
- Indication of whether live consignments are pending clearance; and
- Urgency categorisation — Normal / Time-sensitive / Perishable / Export deadline.
Instruction (v) — Avoidance of Consignment Pendency on Account of FTP Interpretation:
Field formations shall avoid keeping consignments pending solely on account of interpretational issues relating to FTP provisions. Wherever legally permissible, provisional assessment or other facilitative mechanisms under the Customs Act, 1962 may be resorted to, so as to minimise inconvenience to importers/exporters and avoid disruption of legitimate trade.
Pending References:
Difficulties, if any, in implementation of this instruction may be brought to the notice of the Board. In addition, any pending reference already made by field formations directly to DGFT may also be brought to the notice of the Board.
Significance of the Instruction:
This instruction is significant for the following reasons:
- It establishes a clear, hierarchical and institutionalised channel for resolution of FTP interpretation disputes between Customs and DGFT, replacing ad-hoc bilateral correspondence.
- It ensures that DGFT’s policy clarifications are sought at the Board level, preventing inconsistent field-level interpretations that could distort the uniform application of trade policy across India.
- It reduces clearance delays and trade disruption arising from unresolved FTP interpretation issues at the port level, by mandating provisional assessment as an interim facilitation measure.
- The requirement of urgency categorisation and disclosure of live pending consignments ensures that time-sensitive matters — perishables, export deadlines — receive expedited treatment at the Board level.
The Instructions can be accessed at: https://taxinformation.cbic.gov.in/view-pdf/1000576/ENG/Instructions
