DGFT Amends Diamond Imprest Authorisation Rules: IGST Exemption Continues

The Directorate General of Foreign Trade (DGFT) has issued Notification No. 32/2026-27 dated 21 August 2026, amending Para 4.63 of the Foreign Trade Policy 2023 with immediate effect.

· What Has Changed?

DGFT has removed the reference to Compensation Cess exemption from the provisions relating to imports under the Diamond Imprest Authorisation.

This change has been made because Compensation Cess on such imports was already discontinued from 1 February 2026, based on the recommendation of the GST Council in its 56th meeting.

Therefore, this amendment is mainly a technical correction to align the Foreign Trade Policy with the current tax position.

Diamond Imprest Authorisation policy update infographic explaining the removal of the Compensation Cess exemption reference after the cess was discontinued on 1 February 2026.

· Does the IGST Exemption Continue?

Yes.

The exemption from the whole of the applicableIntegrated Tax (IGST) under Section 3(7) of the Customs Tariff Act, 1975, continues for eligible imports under the Diamond Imprest Authorisation Scheme.

The notification does not introduce a new Compensation Cess liability and does not withdraw the existing IGST exemption.

Diamond Imprest Authorisation infographic confirming that the IGST exemption under Section 3(7) of the Customs Tariff Act, 1975 continues for eligible imports.

· What Should Importers Do?

Eligible Diamond Imprest Authorisation holdersshould:

Use the revised Para 4.63 in their compliance documents
Inform their Customs Broker about the amendment
Claim the applicable IGST exemption correctly
Maintain valid authorisation and supporting records
Continue complying with all DGFT and Customs conditions

Checklist for Diamond Imprest Authorisation holders covering revised Para 4.63, Customs Broker notification, correct IGST exemption claim, valid records, and DGFT and Customs compliance.

· Conclusion

The DGFT Diamond Imprest Authorisation amendment is a technical update and does not create a new tax burden. Compensation Cess was already discontinued from 1 February 2026, while the IGST exemption continues for eligible imports under the scheme.

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