Modalities for payment of exempted GST at the time of import of Raw Sugar actually imported under Advance Authorisation (AA) Scheme to be converted into Tariff Rate Quota (TRQ) Scheme.
SEO Title: CBIC Prescribes IGST Payment Procedure for Raw Sugar AA-to-TRQ Conversion
Summary: The Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance, Department of Revenue, has issued Circular No. 37/2026-Cus dated 27 August 2026, bearing F. No. 140605/6/2026-DBK, to prescribe the procedure for payment of IGST on the quantity of Raw Sugar actually imported under the Advance Authorisation (AA) Scheme where the AA is converted into the Tariff Rate Quota (TRQ) Scheme.
The Circular refers to Notification No. 31/2026-27 dated 20.08.2026 issued by the Directorate General of Foreign Trade (DGFT), which amended the import policy condition for Raw Sugar classified under Exim Code 170114 of Chapter 17 of ITC(HS), 2022 – Schedule-I. It also refers to Public Notice No. 27/2026-27 dated 20.08.2026, which prescribed modalities for allocation of the 10 Lakh MT TRQ for Raw Sugar and one-time conversion from the AA Scheme to the TRQ Scheme.
For relevant imports where the AA holder is required to pay IGST, the AA holder may approach the concerned assessment group at the Port of Import (POI) with the relevant details. The assessment group is required to cancel the Out of Charge (OOC), record the reason in the remarks and reassess the Bill of Entry (BE) to charge the tax. The IGST is to be paid against the electronic challan generated in the Customs EDI System.
After payment of the tax, the POI is required to make a notional OOC for the BE in the Customs EDI System so that relevant details, including the IGST amount and its date of payment, can be transmitted to the GSTN portal for determining eligibility under GST provisions. The Circular expressly provides that any interest liability arising from payment of IGST shall stand waived off. The prescribed procedure from reassessment through notional OOC can be applied once to a BE.
The Circular further states that input tax credit relating to the assessed BE shall be enabled subject to the eligibility and conditions for taking ITC under Section 16 of the CGST Act, 2017, Section 17 of the CGST Act, 2017 and Section 18 of the CGST Act, 2017 and the rules made thereunder.
Importantly, the CBIC has clarified that IGST should not be paid through the Voluntary Payment Challan module because that process is not adequate to ensure convenient transfer of the relevant Customs-to-GSTN details necessary for the importer to avail the corresponding GST input tax credit. Chief Commissioners are expected to guide Commissioners and officers in resolving local implementation issues and ensuring convenience to trade, including consequential actions, with suitable Public Notices and Standing Orders to be issued.
The Circular therefore establishes a specific Customs EDI System-based mechanism for payment and reporting of IGST in these AA-to-TRQ conversion cases, while preserving ITC eligibility subject to the applicable statutory conditions.
Circular No. 37/2026-Custom | Dated: 27th August 2026
F. No. 140605/6/2026-DBK
Government of India
Ministry of Finance: Department of Revenue
Central Board of Indirect Taxes and Customs
Drawback Division
To,
All Principal Chief Commissioners/Chief Commissioners,
All Principal Directors General/Directors General,
All Principal Commissioners/Commissioners, under CBIC
Ma’am/Sir,
Subject: Modalities for payment of exempted GST at the time of import of Raw Sugar actually imported under Advance Authorisation (AA) Scheme to be converted into Tariff Rate Quota (TRQ) Scheme – Reg.
1. Kind reference is invited to Notification No. 31/2026-27 dated 20.08.2026 issued by DGFT amending the import policy condition for “Raw Sugar” classified under Exim code 170114 of chapter 17 of ITC(HS), 2022 – Schedule – I and Public Notice No. 27/2026-27 dated 20.08.2026 detailing the modalities for the allocation of the 10 Lakh MT Tariff Rate Quota (TRQ) for Raw Sugar along with the Modalities for one time conversion from Advance Authorisation (AA) Scheme to Tariff Rate Quota (TRQ) Scheme.
2. The matter of payment of IGST in respect of the quantity of Raw Sugar actually imported under Advance Authorisation (AA) Scheme, has been examined in the Board.
3. The following procedure for payment of IGST shall be adopted at the port of import (POI): –
a. for the relevant imports where the AA holder is required to pay IGST, the AA holder may approach the concerned assessment group at the POI with relevant details for purposes of payment of the tax.
b. the assessment group at POI shall cancel the OOC and indicate the reason in remarks. The BE shall be assessed again so as to charge the tax.
c. the payment of tax shall be made against the electronic challan generated in the Customs EDI System.
d. on completion of above payment, the port of import shall make a notional OOC for the BE on the Customs EDI System [so as to enable transmission to GSTN portal of, inter alia, the IGST amount with their date of payment (relevant date) for eligibility as per GST provisions].
e. interest liability, if any, on account of payment of IGST shall stand waived off.
f. the procedure specified at (a) to (d) above can be applied once to a BE.
4. The input credit with respect to such assessed BE shall be enabled to be available subject to the eligibility and conditions for taking input tax credit under Section 16, Section 17 and Section 18 of the CGST Act, 2017 and rules made thereunder.
5. Further, it is clarified that the payment of IGST should not be made through the Voluntary Payment Challan module as the process is not adequate to ensure a convenient transfer of relevant details between Customs and GSTN so that Input Tax Credit of GST may be taken by the importer.
6. The Chief Commissioners are expected to proactively guide the Commissioners and officers to iron out any local level issues in implementing the broad procedure described in para 3 and 4 above and ensuring appropriate convenience to the trade including in carrying out consequential actions. For this, suitable Public Notice and Standing Order should be issued.
Difficulties, if any, in the implementation of the above Circular may be brought to the notice of the Board.
Hindi version follows.
Yours faithfully,
(Parag Aggarwal)
OSD (Drawback)
