The Gujarat High Court has ruled maize/corn starch qualifies for duty-free import under SION Entry E22 as an immediate input for liquid glucose manufacturing, allowing DFIA benefits under the Export Promotion Policy.
Gujarat HC Grants DFIA Duty-Free Status for Maize Starch
The Gujarat High Court has ruled in favor of a manufacturer allowing duty-free import of maize/corn starch under the Duty Free Import Authorization (DFIA) scheme, holding that it qualifies as an ‘immediate input’ under SION (Standard Input Output Norms) Entry E22 for the production of liquid glucose.
The department had denied DFIA benefits, arguing that starch was not directly listed as an input. However, the court observed that starch undergoes direct chemical conversion into glucose through enzymatic hydrolysis, making it a principal input. The judgment relied on technical evidence showing 95% of starch converts into glucose, satisfying the materiality and traceability test under the Policy.
Where the imported input undergoes direct and substantial transformation into the final product, and such relation is recognized under SION, duty-free benefit under DFIA cannot be denied merely due to nomenclature discrepancy.
The ruling reinforces the purposive interpretation of SION norms in export incentive schemes. It benefits food processing and biotech exporters relying on imported raw materials for value-added exports.
Implications for Exporters
The decision sets a precedent for similar DFIA claims involving derivative products. Practitioners should align input descriptions with SION entries and maintain process flow documentation to substantiate claims in potential disputes with the Customs department.
Citations
- DGFT Policy Circular: DFIA Scheme; SION Entry E22
