Exporters get relief as DGFT removes physical challans

Ziraat Times Team Report

New Delhi, August 10: The Directorate General of Foreign Trade (DGFT) has removed the requirement for exporters to submit physical duty payment challans while applying for Export Obligation Discharge Certificates (EODC) under the Advance Authorisation (AA) and Export Promotion Capital Goods (EPCG) schemes.

The measure, aimed at easing compliance and reducing transaction costs, will apply to voluntary duty payments made on or after August 1, 2026.

Under the new system, licence-wise voluntary duty payment data received from Customs through ICEGATE has been integrated with DGFT’s online systems. This will enable authenticated verification of duty payments directly against the concerned authorisation.

Exporters will be able to access authenticated payment details on the DGFT Customer Portal and verify that the payment has been correctly mapped to the relevant authorisation before filing their EODC application.

The same payment records will be available to DGFT Regional Authorities through the DGFT Back Office, eliminating the need for manual verification of payment particulars.

According to the DGFT, the digital integration is expected to speed up processing, reduce avoidable correspondence, improve data accuracy and bring greater consistency in decision-making across Regional Authorities.

The facility has been implemented through an API-based data exchange between DGFT and ICEGATE, under which duty payment details are electronically transmitted from Customs systems to the DGFT’s EODC processing workflow.

The DGFT said the move would reduce documentation, follow-up requirements and physical interface for exporters, with MSMEs that handle closure formalities in-house expected to particularly benefit from the simplified process.

The DGFT has issued Trade Notice No. 15/2026-27 dated August 5, 2026, informing exporters and other stakeholders about the new arrangement.

The initiative forms part of the government’s broader digital transformation and trade facilitation measures aimed at creating a more efficient and predictable regulatory environment and reducing reliance on physical documentation.

Under the Advance Authorisation Scheme, exporters are permitted to import inputs duty-free where such inputs are physically incorporated into the export product. The EPCG Scheme allows import of capital goods at concessional or zero customs duty against an export obligation.

In cases where the prescribed export obligation is not fully fulfilled, the authorisation holder is required to regularise the case by voluntarily paying the proportionate customs duty saved along with applicable interest, followed by an application for an EODC to close the authorisation.

Previously, proof of such duty payment had to be submitted physically and manually verified by the concerned Regional Authority.