Indirect Tax Laws · Foreign Trade Policy

Trade Facilitation, Status Holders and Dispute Resolution under FTP 2023

Updated 5 October 2026 · Fact-checked

Under FTP 2023, Status Holders are exporters recognised as One to Five Star based on export performance. They get facilitation benefits. The Amnesty Scheme let defaulters of Advance Authorisation and EPCG regularise by paying duty and capped interest. Disputes follow the FT(D&R) Act: show cause notice, hearing, adjudication order, then appeal. Answer in provision-fact-conclusion form.

Understand Trade Facilitation, Status Holders and Dispute Resolution

The Foreign Trade (Development and Regulation) Act, 1992 gives the Central Government power to make the Foreign Trade Policy. FTP 2023 sits on top of it. It does three things in this topic: it rewards good exporters, it makes compliance easier, and it gives a fair route when the DGFT's office and an exporter disagree.

Status Holders are exporters recognised by the DGFT because of their export performance. Recognition is in star categories, One Star to Five Star. A higher star needs higher export earnings, measured in US dollars over the current and previous financial years as the policy prescribes. Recognition is a reward for track record. The benefits are mostly about trust: self-declaration based processes, lighter documentation and relaxed security requirements. Check the exact list in the policy text before you write benefits in an answer.

Trade facilitation covers the ease of doing business push in FTP 2023: online and paperless applications, reduced fees and procedures, and focus on districts and towns of export excellence. It also covers support for e-commerce exports and merchanting trade. Think of it as the policy trying to cut time and cost for exporters.

The Amnesty Scheme is a one-time settlement. Many holders of Advance Authorisation and EPCG authorisations could not meet their export obligation in time, and their authorisations stayed in default. Under the scheme, the exporter paid the customs duty foregone on the unfulfilled portion of the export obligation, plus interest. Interest was capped at 100% of the duty. No interest was charged on the additional customs duty or the special additional duty. The scheme was available only for a limited window that has now closed. Questions test the logic and the conditions, so learn them.

Dispute resolution follows natural justice. The authority must issue a notice, give a personal hearing and pass a reasoned order. If you are aggrieved by the order, section 15 of the FT(D&R) Act allows an appeal to the appellate authority directed under that section, within 45 days of the order. Section 16 allows the Central Government to revise an order from which no appeal has been preferred, or an order passed on appeal, within 3 months. Revision is not a freely parallel alternative to appeal. It works only in the manner section 16 provides. Penalty, confiscation, and suspension or cancellation of the Importer Exporter Code (IEC) cannot be ordered without giving the person a reasonable opportunity to be heard.

Key rules to remember

Status Holder recognition: Star category = f(export earnings in US$ over the period set in FTP 2023); Five categories: One Star to Five Star. Higher star means higher export performance. Learn the exact thresholds from the policy text; do not guess them in the exam.
Amnesty payment (unfulfilled export obligation): Amount payable = Duty foregone on the unfulfilled portion of EO + interest, with interest capped at 100% of that duty. No interest on additional customs duty or special additional duty.; Applies to Advance Authorisation and EPCG defaults. The cap on interest is the key benefit. Interest was not charged on the additional customs duty or special additional duty. The window for applications was limited and has ended.
Principle of natural justice in adjudication: Show cause notice → reasonable opportunity of hearing → reasoned order; No order of penalty, confiscation, or suspension/cancellation of IEC without this.
Appeal and revision: Section 15: appeal to the appellate authority directed under that section, within 45 days of the order. Section 16: Central Government may revise an order from which no appeal has been preferred, or an order passed on appeal, within 3 months.; Revision is not a freely parallel alternative to appeal. It applies only to orders of the kind section 16 covers: orders not appealed against, or orders passed on appeal.

How to solve Trade Facilitation, Status Holders and Dispute Resolution questions

Every question on this topic is either a benefit question, a regularisation question or a dispute procedure question. Use one method.

1Identify the type: recognition (Status Holder), facilitation measure, Amnesty regularisation, or adjudication/appeal.
2State the governing provision in plain words: the FT(D&R) Act for powers, appeals and revision, FTP 2023 for status, facilitation and the amnesty.
3List the facts that decide the answer: export performance, type of authorisation, extent of unfulfilled export obligation, date of order, whether a notice and hearing were given.
4Apply the condition to the facts one by one. For the amnesty, compute the duty on the unfulfilled portion first, then interest, then apply the cap.
5For disputes, check the sequence: notice, hearing, reasoned order, then appeal to the appellate authority within 45 days (section 15), and revision by the Central Government within 3 months (section 16) of an order not appealed against or passed on appeal.
6Conclude clearly: eligible or not, amount payable, order valid or defective, forum for appeal or revision.
7Add one line on the practical point, such as filing online or keeping proof of export, if it fits.

Quickest way: Three-line scan for FTP dispute and status questions

When to use it: Use this in a 6 to 8 mark written answer or when a case scenario MCQ mentions DGFT, Status Holder or amnesty.

Pick the label: Status benefit, Amnesty, or Adjudication/Appeal.
For the amnesty, remember: duty on the unfulfilled portion, interest capped at 100% of that duty, one-time and limited window.
For disputes, remember: notice and hearing first, appeal to the appellate authority in 45 days (section 15), and revision by the Central Government within 3 months (section 16) of an order not appealed against or passed on appeal. Write the answer in provision, facts, conclusion order.

Common mistakes in Trade Facilitation, Status Holders and Dispute Resolution

Treating Status Holder recognition as automatic once an exporter has an IEC.
Students confuse the IEC, which is a basic identity for trade, with recognition, which is earned by performance.
Fix: Write that an IEC is needed to trade, while Status Holder recognition needs export performance, and the star depends on the level reached.
Saying the Amnesty Scheme waives the duty completely.
The word amnesty suggests forgiveness.
Fix: The duty on the unfulfilled portion of the export obligation must be paid. The relief is mainly the cap on interest and closure of the default.
Writing that the amnesty is still open for new applications.
Students read old notes and forget the limited window.
Fix: Say it was a one-time scheme with a limited application period. Answer questions on its conditions and effect, not on filing now.
Stating the interest cap or the treatment of additional duties without checking the notification.
Students memorise the headline cap and assume it covers every component.
Fix: Say interest was capped at 100% of the duty saved or payable on the unfulfilled portion, as per the DGFT notification. Verify the cap and the treatment of additional duties against the notification.
Ignoring natural justice when the question says an order was passed without notice.
Students jump straight to the appeal route.
Fix: First state that penalty, confiscation or IEC cancellation requires a show cause notice and hearing. Conclude that the order is open to challenge, then give the appeal route.
Presenting revision as a freely parallel alternative to appeal.
Students memorise appeal and revision as two independent options available at the same time.
Fix: Describe section 15 as appeal to the appellate authority within 45 days. Describe section 16 as revision by the Central Government within 3 months, of an order from which no appeal has been preferred or which was passed on appeal.
Quoting section numbers or time limits from memory that are not certain.
The FT(D&R) Act is short and numbers get mixed up.
Fix: Quote only what you know: section 15 appeal within 45 days, section 16 revision within 3 months. Otherwise describe the provision in words, which still earns marks.

Worked examples

Example 1

Illustration based on stated assumptions: Arvind Exports holds an Advance Authorisation. It imported inputs on which customs duty of ₹10,00,000 was exempted in total. It exported only 60% of the export obligation before the authorisation expired. Assume the duty foregone on the unfulfilled portion is proportionate and no additional customs duty or special additional duty applies. Assume also that interest calculated at the policy rate on that duty is ₹5,00,000. This interest figure is assumed and is not a prescribed rate. Under the Amnesty Scheme of FTP 2023, with interest capped at 100% of the duty, how much does Arvind pay?

Show the solution

Find the unfulfilled export obligation: 100% − 60% = 40%.
Duty foregone on the unfulfilled portion = ₹10,00,000 × 40% = ₹4,00,000.
Interest as computed (assumed illustration) = ₹5,00,000.
Cap on interest = 100% of the duty = ₹4,00,000.
Interest payable is the lower figure: ₹4,00,000, since ₹5,00,000 exceeds the cap.
Total payable = ₹4,00,000 + ₹4,00,000 = ₹8,00,000.
If additional customs duty or special additional duty had applied, it would be paid without interest on it.

Answer: On these assumptions, Arvind pays ₹8,00,000 (duty ₹4,00,000 and capped interest ₹4,00,000) and the default is regularised under the amnesty, provided it applied within the window and met the scheme conditions. The figures are an illustration, not prescribed amounts.

Example 2

Case: The Regional Authority of DGFT cancels the Importer Exporter Code of Meera Traders for alleged contravention of the policy. Meera was never issued a notice or given a hearing. Advise Meera.

Show the solution

Provision: under the FT(D&R) Act, 1992 the authority may suspend or cancel an IEC for contravention, but no such order can be made without giving the holder a reasonable opportunity of being heard.
Facts: the order was passed without a show cause notice or hearing.
Application: the principles of natural justice were breached, so the order is defective and open to challenge.
Remedy 1: Meera can file an appeal before the appellate authority directed under section 15 within 45 days of the order, stating the breach of natural justice and asking for the order to be set aside.
Remedy 2: Under section 16, the Central Government may revise the order within 3 months. This applies if no appeal has been preferred against the order, or to the order passed on appeal. It is not a freely parallel alternative to the appeal.

Answer: The cancellation is not sustainable because no notice or hearing was given. Meera should appeal to the appellate authority within 45 days, citing the denial of natural justice. The Central Government may also revise the order under section 16 within 3 months, if no appeal is preferred or against the order passed on appeal.

Exam tips

Write the answer in provision, facts, conclusion order. Examiners award marks for each stage.
For the amnesty, show the working: duty on the unfulfilled portion, interest, cap, total. A clear working earns marks even if the final figure is off. If a question gives an interest figure, use it as given.
For case MCQs, find the key fact first: unfulfilled export obligation, missing notice or hearing, or the export performance figure.
Write the 45-day appeal period (section 15) and the 3-month revision period (section 16) only if you are sure, and do not guess other limits or section numbers.
Link status benefits to trust and self-declaration. Do not list benefits you cannot recall exactly.

Practice questions from Foreign Trade Policy

Trade Facilitation, Status Holders and Dispute Resolution: frequently asked questions

What are the benefits of a Status Holder under FTP 2023?

Status Holders are recognised exporters who receive facilitation benefits, mainly self-declaration based processes, lighter documentation and relaxed security requirements. The exact list is in the policy text and in the DGFT's procedures, so confirm it before you quote it. The higher the star, the stronger the recognition.

What was the Amnesty Scheme under FTP 2023?

It was a one-time scheme for holders of Advance Authorisation and EPCG authorisations who had defaulted on their export obligation. They could regularise by paying the customs duty foregone on the unfulfilled portion, with interest capped at 100% of the duty. Interest was not charged on additional customs duty or special additional duty. The application window was limited and has closed.

How do I challenge an order of the DGFT authority?

Under section 15 of the FT(D&R) Act, you can appeal to the appellate authority within 45 days of the order. Under section 16, the Central Government may revise an order from which no appeal has been preferred, or an order passed on appeal, within 3 months. Revision is not a freely parallel alternative to appeal.

Can an IEC be cancelled without notice?

No. The Act requires that the holder be given a reasonable opportunity of being heard before penalty, confiscation, or suspension or cancellation of the IEC. An order passed without it can be challenged on grounds of natural justice.