The Directorate General of Foreign Trade (DGFT) has scrapped the requirement for exporters to submit physical duty payment challans when applying for Export Obligation Discharge Certificates under the Advance Authorisation (AA) and Export Promotion Capital Goods (EPCG) schemes. The Commerce Ministry confirmed the DGFT export policy change in a statement issued on Monday, August 10, 2026, following a trade notice dated August 5, 2026.
Under the revised process, exporters making voluntary duty payments on or after August 1, 2026 no longer need to attach physical challans to their applications for closing out AA and EPCG authorisations. DGFT has integrated licence-wise voluntary duty payment data received directly from Customs and ICEGATE into its online systems, allowing authenticated digital verification of payments against the relevant authorisation.
How Does This DGFT Reform Affect Exporters?
Exporters operating under the Advance Authorisation and EPCG schemes have long flagged the manual challan submission and verification process as a source of delay in closing out export obligations. By replacing physical paperwork with authenticated digital records pulled directly from Customs and ICEGATE, DGFT expects to shorten processing timelines for Export Obligation Discharge Certificates, cut down on human intervention, and reduce data-entry errors that previously triggered queries and rework. Exporters with duty payments made on or after August 1, 2026 are the first to benefit, with the digital verification process applying automatically once payment data syncs from ICEGATE.
What Do Trade Bodies Say About the Change?
Industry groups representing exporters have generally welcomed DGFT’s continued push toward paperless trade facilitation, viewing the challan reform as part of a broader digitisation drive that has included earlier moves such as extending export obligation periods for AA and EPCG authorisations. Trade compliance professionals note that linking Customs and ICEGATE payment records directly to DGFT’s authorisation database closes a long-standing gap where physical and digital records could fall out of sync, a mismatch that previously caused delays in certificate issuance.
Market and Trade Reaction
The reform lands alongside a broader wave of DGFT compliance simplification measures through 2026 and comes as Indian exporters navigate elevated global tariff pressure, including new US duties on a wide set of trading partners. Easier closure of AA and EPCG authorisations is expected to modestly improve working-capital cycles for exporters who had capital tied up pending certificate approval, though the scheme-specific nature of the change means its impact will be concentrated among manufacturers and merchant exporters using these two authorisation routes.
What Happens Next?
DGFT’s trade notice dated August 5, 2026 is now in effect for all voluntary duty payments from August 1, 2026 onward, meaning exporters filing new Export Obligation Discharge Certificate applications should already see the simplified process in operation. Exporters with older authorisations and pending challan-based applications filed before August 1 should check with DGFT’s regional offices on whether the digital verification process applies retroactively, or whether previously submitted physical challans will continue to be processed under the earlier system.
Frequently Asked Questions
What has DGFT changed for exporters under the Advance Authorisation and EPCG schemes?
DGFT has removed the requirement to submit physical duty payment challans with Export Obligation Discharge Certificate applications, replacing manual submission with digital verification using payment data received directly from Customs and ICEGATE.
From when does the new DGFT process apply?
The simplified process applies to voluntary duty payments made on or after August 1, 2026, under a DGFT trade notice dated August 5, 2026 and confirmed by the Commerce Ministry on August 10, 2026.
Why did DGFT remove the physical challan requirement?
DGFT integrated licence-wise voluntary duty payment data from Customs/ICEGATE with its online systems, enabling authenticated verification without manual paperwork, which is expected to shorten processing timelines and reduce errors.
Leave a comment