The Central Board of Indirect Taxes and Customs (CBIC), Department of Revenue, Ministry of Finance, has issued Circular No. 31/2026-Customs dated 4 July 2026 regarding the issuance of a Deficiency Memo under Section 74 of the Customs Act, 1962 for processing duty drawback claims. The Circular has been issued under F. No. 609/25/2025-DBK/CBIC.
The measure seeks to bring greater uniformity, clarity and procedural consistency in the scrutiny and processing of drawback claims filed under Section 74 of the Customs Act, 1962. The issue was examined by the Board following an audit observation that there was no prescribed format for a Deficiency Memo in respect of such duty drawback claims.
After examining the matter in consultation with field formations, CBIC has directed that Deficiency Memos under Section 74 may be issued in the standard format enclosed as Annexure-I to Circular No. 31/2026-Customs. The prescribed format is intended to ensure that deficiencies in claims are communicated to exporters in a structured and transparent manner.
As set out in Annexure-I on page 2 of the Circular, the Deficiency Memo enables Customs authorities to identify and seek relevant documents or information required for processing a drawback claim against the concerned Shipping Bill. These may include, as applicable, Annexure-II, calculation sheet for the drawback claim, copy of Shipping Bill, export invoice and packing list, Export Bill of Lading, copy of Bill of Entry, import invoice, import packing list and evidence of payment of duty at the time of import through TR-6 Challan.
The standard format also provides for seeking a self-declaration regarding non-claim of the IGST amount paid on re-exported goods in cases where the exporter claims only Basic Customs Duty (BCD) and Social Welfare Surcharge (SWS). Where refund of IGST paid at the time of import is claimed, the exporter may be required to furnish a certificate from the jurisdictional Central/State/UT GST officer confirming that no credit of the integrated tax or Compensation Cess paid on imported goods has been availed, or that no refund of such credit or tax on re-exported goods has been claimed.
Depending upon the facts of the case, the Deficiency Memo may further call for a notarised affidavit on ₹100 stamp paper, permission from the Reserve Bank of India for re-export of goods wherever necessary, and any other relevant documents required for processing the claim.
The prescribed format further states that where the requirements specified in the Deficiency Memo are not complied with within 30 days, the drawback claim may be treated as not filed for the purpose of Rule 5(1), in accordance with Rule 5(4)(b) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 2017. This provision underscores the importance of timely submission of the documents and information sought by Customs authorities.
The standardisation of the Deficiency Memo is expected to facilitate a more consistent, transparent and efficient mechanism for communicating deficiencies and processing duty drawback claims under Section 74 across Customs field formations.
The Circular can be accessed at: https://taxinformation.cbic.gov.in/view-pdf/1003332/ENG/Circulars
