โIndirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisoryโ
Dated: 20.03.2026
Duty Drawback on Export of Unlocked Mobile Handsets by Merchant Exporters โ
The Central Board of Indirect Taxes & Customs (CBIC), under the Ministry of Finance, has issued an important instruction regarding duty drawback on the export of unlocked mobile handsets by merchant exporters. โ This directive, outlined in Instruction No. โ 02/2026-Customs dated 19th March 2026, is based on a series of judicial rulings that have clarified the legal position on this matter. โ
Background of the Issue
The issue of duty drawback on unlocked mobile handsets exported by merchant exporters has been a subject of legal scrutiny. โ The matter was brought before the Delhi High Court in case WP (C) 9461/2023, which delivered its judgment on 13th February 2025. โ The High Court’s decision was subsequently upheld by the Honโble Supreme Court in its order dated 18th July 2025 (SLP Diary No. โ 30758/2025). โ Furthermore, a review petition filed in the matter was dismissed by the apex court on 29th January 2025 (Review Petition (Civil) Diary No. โ 69677/2025). โ
Key Directives from CBIC โ
In light of the judicial rulings, the CBIC has directed all field formations to comply with the orders issued by the courts. โ The instruction emphasizes the importance of adhering to the legal position established by the Delhi High Court and upheld by the Supreme Court. โ This ensures uniformity in the implementation of duty drawback provisions for merchant exporters dealing with unlocked mobile handsets. โ
Implications for Merchant Exporters
Merchant exporters involved in the export of unlocked mobile handsets should take note of the following:
- Legal Clarity: The judicial rulings provide clarity on the eligibility of duty drawback for unlocked mobile handsets, ensuring that exporters can claim benefits as per the law. โ
- Compliance: Exporters must ensure that their claims for duty drawback align with the directives issued by CBIC and the legal precedents set by the courts. โ
- Field Formation Adherence: Customs field formations across the country are required to implement the court orders scrupulously, ensuring a consistent approach to duty drawback claims. โ
Conclusion
The CBIC’s instruction marks a significant step in resolving the ambiguity surrounding duty drawback on unlocked mobile handsets exported by merchant exporters. โ By adhering to the judicial rulings, the government aims to provide clarity and uniformity in the application of duty drawback provisions. โ Merchant exporters are advised to stay updated on these developments and ensure compliance with the latest guidelines.
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Source: CBIC, Ministry of Finance, Govt. of India
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