Circular
27 Aug 2026
CBIC
Operative & In Force
37/2026 — 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.
Legal Citation
CBIC Circular No. 37/2026, dt. 27-08-2026
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Executive Directive & Regulatory Background
This CBIC Circular No. 37/2026-Cus, dated August 27, 2026, outlines the specific modalities for the payment of Integrated Goods and Services Tax (IGST) on raw sugar (Exim code 170114) that was initially imported under the Advance Authorisation (AA) Scheme but is now being converted to the Tariff Rate Quota (TRQ) Scheme.
Key Statutory Takeaways & Compliance Mandates
01
Adjudication, Demand & Penalty Provisions
This conversion is necessitated by DGFT Notification No. 31/2026-27 and Public Notice No. 27/2026-27, both dated August 20, 2026, which allocated a 10 Lakh MT TRQ for raw sugar.
02
Input Tax Credit (ITC) Provisions
The circular provides a detailed procedure for re-assessment of Bill of Entry (BE) at the Port of Import (POI) to levy IGST, ensuring proper transmission of data to GSTN for Input Tax Credit (ITC eligibility).
03
Adjudication, Demand & Penalty Provisions
A significant relief is the waiver of interest liability on this IGST payment.
04
The circular emphasizes that IGST should not be paid via the Voluntary Payment Challan module to ensure seamless ITC flow.
05
Applicability & Compliance Framework
This aims to streamline the transition for importers and ensure compliance while facilitating legitimate ITC claims.
Key Procedural Changes & Industry Impact
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Mandatory payment of IGST for raw sugar imported under AA Scheme now converted to TRQ Scheme.Importers must pay IGST on previously exempted raw sugar imports. This requires re-assessment of the Bill of Entry at the Port of Import.
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Specific procedure for IGST payment at Port of Import (POI) involving cancellation and re-assessment of OOC and BE.Importers need to approach the assessment group at the POI. The OOC will be cancelled, BE re-assessed to charge tax, and payment made via electronic challan. A notional OOC will be issued for GSTN transmission.
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Waiver of interest liability on the IGST payment for these specific conversions.Taxpayers are relieved from any interest penalties that might have accrued due to the delayed payment of IGST under this conversion scheme.
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Input Tax Credit (ITC) availability subject to Sections 16, 17, and 18 of the CGST Act, 2017.Importers can claim ITC on the paid IGST, provided they meet the general eligibility and conditions stipulated under GST law. This ensures the tax paid is not a sunk cost.
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Prohibition of using the Voluntary Payment Challan module for this IGST payment.Importers must follow the prescribed re-assessment and electronic challan process to ensure proper data transfer to GSTN, which is crucial for their ITC claims. Using the voluntary module would hinder ITC availability.