Notification No.: 32/2026-27
Dated: 21st August 2026
The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce & Industry, has amended Para 4.63 of the Foreign Trade Policy (FTP), 2023, through Notification No. 32/2026-27. The amendment removes the reference to Compensation Cess exemption on imports under the Diamond Imprest Authorisation (DIA) scheme, following the discontinuation of the cess from 1st February 2026.
The change is primarily a statutory update to remove an exemption reference that is no longer applicable; it does not introduce a new duty or alter the other exemptions available under Para 4.63.
Detailed Analysis
Para 4.63 of FTP 2023 specifies the customs duty and tax exemptions available for imports made under the Diamond Imprest Authorisation scheme.
Existing Provision
Before the amendment, Para 4.63 provided exemptions from:
- Basic Customs Duty
- Additional Customs Duty
- Education Cess
- Anti-dumping Duty
- Countervailing Duty
- Safeguard Duty
- Transition Product Specific Safeguard Duty
- Integrated Tax leviable under sub-section (7) of Section 3 of the Customs Tariff Act, 1975
- Compensation Cess leviable under sub-section (9) of Section 3 of the Customs Tariff Act, 1975
What Has DGFT Changed?
Notification No. 32/2026-27 removes the reference to Compensation Cess from Para 4.63.
The amendment specifically omits the words relating to the exemption from Compensation Cess under sub-section (9) of Section 3 of the Customs Tariff Act, 1975.
The other duty and tax exemptions listed under Para 4.63 remain unchanged, including the exemption from Integrated Tax under sub-section (7) of Section 3.
Why Was the Reference Removed?
The change follows the discontinuation of Compensation Cess with effect from 1st February 2026. Since the levy itself is no longer applicable, the corresponding exemption reference in Para 4.63 was no longer relevant.
Accordingly, DGFT has updated the wording of the FTP provision to remove this redundant reference.
What Does This Mean for Diamond Imprest Authorisation?
The amendment does not represent a new withdrawal of a currently applicable Compensation Cess exemption. Instead, it updates Para 4.63 to reflect the fact that Compensation Cess has already been discontinued.
The other exemptions specified under Para 4.63, including the Integrated Tax exemption, continue to remain part of the provision.
Conclusion
DGFT Notification No. 32/2026-27 updates Para 4.63 of FTP 2023 by removing the reference to Compensation Cess exemption under the Diamond Imprest Authorisation scheme. The amendment reflects the discontinuation of Compensation Cess from 1st February 2026 and does not alter the other exemptions specified under Para 4.63.
To view the DGFT notification, click here.
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