Export Incentives on Short Realisation Clarified

Through Circular No. 20/2026-Customs, the CBIC has provided long-awaited clarity on the treatment of short realisation in export incentive claims. 

The circular confirms that routine deductions such as agency commission and foreign banking charges will not reduce the FOB value for incentive computation within a defined threshold, ensuring consistency with legacy drawback jurisprudence.

Importantly, the recognition of ECGC compensation as deemed realisation, subject to RBI write-off approval and supporting certification, addresses a key commercial risk area for exporters. 

This eliminates the need to reverse benefits in genuine default scenarios and strengthens the linkage between trade finance mechanisms and incentive eligibility.

Overall, the clarification reduces compliance friction, enhances certainty, and signals a policy intent to stabilise export incentive frameworks while maintaining safeguards.