CBIC Issues Special Procedure for Export Cargo Returning to India After Strait of Hormuz Shipping Disruption

CBIC Issues Special Procedure for Export Cargo Returning to India After Strait of Hormuz Shipping Disruption

Introduction

The Central Board of Indirect Taxes and Customs (CBIC) has issued a circular prescribing a simplified procedure for handling export cargo that has returned to Indian ports after commercial vessels were forced to turn back due to the closure of the Strait of Hormuz. Invoking its powers under Customs Act, 1962, the Board introduced temporary operational guidelines to facilitate smooth handling of such cargo and avoid procedural delays for exporters and shipping operators affected by the disruption.

Factual Background

Shipping routes through the Strait of Hormuz were disrupted amid ongoing conflict in the Gulf region, forcing several vessels carrying export cargo from India to abandon their voyages and return to Indian ports before reaching their destination. Following the disruption, CBIC received representations from field formations indicating that multiple vessels carrying export consignments had returned due to the closure of the maritime route. In response to these representations, the Board issued a circular prescribing a simplified procedure to handle such returning cargo and prevent operational bottlenecks at Indian ports.

Procedural Background

CBIC exercised its authority under Section 143AA of the Customs Act, 1962 to introduce special procedural relaxations for handling export cargo returning to India under exceptional circumstances. The circular sets out operational instructions for customs authorities at ports to facilitate quick processing of returned cargo while ensuring regulatory compliance and verification of goods. The relaxation introduced by the circular is temporary and remains applicable for a period of fifteen days beginning from March 8, 2026.

Issues

1. How export cargo returning to India due to disruption of maritime routes should be handled under customs procedures.

2. Whether procedural relaxations could be granted to facilitate the clearance and re-entry of such cargo.

Contentions of the Parties

Field formations and industry stakeholders had represented to CBIC that vessels carrying export cargo from India had been compelled to return after maritime routes were disrupted due to the closure of the Strait of Hormuz. They highlighted the need for simplified customs procedures to handle such cargo efficiently and avoid delays.

CBIC considered these representations and acknowledged that the extraordinary circumstances required temporary procedural relaxations to address operational challenges faced by exporters and shipping operators.

Reasoning and Analysis

The Board clarified that vessels returning with export cargo would generally be permitted to berth at the same Indian port from which they had departed, except in cases involving transshipment. Where a vessel remains within Indian territorial waters and the Export General Manifest (EGM) or Shipping Data Manifest (SDM) has not been filed, the master of the vessel must submit an undertaking confirming that the vessel did not cross India’s territorial waters. In such cases, the vessel may berth without filing a Sea Arrival Manifest, and containers may be offloaded without filing a Bill of Entry after verification of shipping documents. Customs authorities are required to verify container details against the corresponding Shipping Bills and examine the integrity of container seals. If seals are found to be tampered with, the cargo will be subjected to complete examination.

The circular also directs that the Shipping Bills and Let Export Orders associated with such cargo must be cancelled. Exporters may be permitted to bring the goods back into the domestic area through the “Back to Town” facility. In cases where the EGM or SDM has already been filed or the vessel had entered international waters but returned without calling at a foreign port, the cargo may still be offloaded without filing a Bill of Entry, subject to document verification. CBIC further announced that a system-based facility would be introduced in the ICES system to enable cancellation of Shipping Bills even after the filing of the Export General Manifest. Additionally, customs authorities have been instructed to recover export incentives such as IGST refunds or duty drawback if such benefits had already been disbursed for the returned cargo.

Decision

CBIC issued a circular introducing simplified procedures for handling export cargo returning to Indian ports due to disruptions in maritime routes caused by the closure of the Strait of Hormuz.

The special procedure will remain in force for fifteen days from March 8, 2026, during which customs authorities will implement the prescribed operational relaxations.