โIndirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisoryโ
Dated: 18.03.2026
Navigating Export Cargo Challenges: Procedures for Handling Cargo Returned to Indian Ports Due to Strait of Hormuz Closure
The closure of the Strait of Hormuz, a critical maritime route, has led to significant disruptions in international shipping. โ In response, the Central Board of Indirect Taxes & Customs (CBIC) has issued Circular No. โ 12/2026-Customs, dated March 17, 2026, outlining procedures for handling export cargo that has returned to Indian ports due to such disruptions. This article provides a detailed overview of the prescribed procedures and guidelines to ensure smooth trade operations and compliance with the Customs Act, 1962. โ
Background
The Strait of Hormuz is a vital shipping route for global trade, particularly for liquid bulk and break bulk cargo. โ Its closure has forced vessels carrying export cargo to divert to Indian ports, creating logistical challenges for exporters and customs authorities. โ To address these issues, the CBIC has introduced measures under Section 143AA of the Customs Act, 1962, to facilitate the handling, storage, and onward transshipment or re-export of affected cargo. โ
Key Procedures for Handling Returned Export Cargo โ
- Filing of Sea Arrival Manifest (SAM) โ
When a vessel carrying export cargo returns to an Indian port other than its original port of departure, the shipping line or its authorized agent must file the Sea Arrival Manifest (SAM) at the port of landing. โ This ensures proper documentation and tracking of the cargo. โ
- Verification of Containers โ
The proper officer at the port of landing will verify the containers against the SAM and other export documents. โ During this process:
- The integrity of container seals will be checked and matched with the seal details declared in the export documents. โ
- If seals are found tampered or not intact, the containers will undergo 100% examination at the port of landing. โ
- Communication Between Ports โ
Upon the exporterโs request, the Customs formation at the port of landing will communicate with the Customs formation at the port of export to:
- Verify whether export incentives such as IGST refunds, duty drawbacks, or other benefits have been disbursed. โ
- Cancel the Shipping Bill and Let Export Order (LEO) in the ICES system, if necessary. โ
- Ensure reversal or recovery of export incentives if they have already been disbursed. โ
- Back to Town (BTT) Facility โ
Once verification is complete and confirmation is received from the port of export, the proper officer at the port of landing may permit the Back to Town (BTT) facility. โ This is subject to compliance with applicable documentation and procedures. โ
- Cancellation of Shipping Bills Post EGM โ
The Directorate General of Systems (DG System) will provide a new option in the ICES system to cancel Shipping Bills post Export General Manifest (EGM). โ This ensures that export incentives are not disbursed for cargo that has returned to Indian ports. โ Until this system is operationalized, field formations at the port of export must maintain manual records and update the system once it becomes functional. โ
- Sharing of Information โ
Details of cancelled Shipping Bills will be shared with the Reserve Bank of India (RBI), Directorate General of Foreign Trade (DGFT), and other concerned agencies via ICEGATE to ensure transparency and compliance. โ
Handling Liquid Bulk/Break Bulk Cargo โ
For vessels carrying liquid bulk or break bulk cargo destined for foreign ports but diverted to Indian ports due to maritime security concerns or logistical exigencies, the following measures apply:
- Temporary unloading and storage of cargo within Customs areas, approved bonded warehouses, or bonded tank facilities may be permitted by the jurisdictional Principal Commissioner/Commissioner of Customs. โ
- Such permission is granted on a case-by-case basis under Customs supervision, ensuring the cargo remains under Customs control and is not cleared for home consumption or diverted into the Domestic Tariff Area. โ
- Proper inventory records must be maintained, and suitable bonds or undertakings must be executed. โ
International Transshipment of LCL Cargo โ
The CBIC has extended the facility for international transshipment of Less-than-Container Load (LCL) cargo from all notified ports and international airports in India until March 31, 2026. โ This is subject to the procedures outlined in CBIC Circular No. โ 14/2007-Cus dated March 16, 2007. โ The Principal Chief Commissioner/Chief Commissioner of Customs may decide to extend this facility based on the availability of safe and secure storage space and adequate infrastructure. โ
Validity of Relaxations โ
The relaxations provided under Circular No. โ 12/2026-Customs, along with those under Circulars No. โ 09/2026-Customs and No. โ 10/2026-Customs, will remain in force until March 31, 2026. โ
Addressing Implementation Challenges โ
The CBIC has invited stakeholders to report any difficulties in implementing the procedures outlined in the circular to the Board for resolution. โ This proactive approach ensures that trade operations remain smooth and efficient despite disruptions in international shipping routes. โ
Conclusion
The closure of the Strait of Hormuz has posed significant challenges to global trade, but the CBICโs timely measures under Circular No. โ 12/2026-Customs provide a clear framework for handling returned export cargo at Indian ports. โ By ensuring compliance with the Customs Act, 1962, and facilitating international transshipment, these procedures aim to minimize disruptions and support the trade community during challenging times.
In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.
We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!
Source: CBIC, Ministry of Finance, Govt. of India
Handy Download:
Leave a Reply