One Star Export House status on two years’ performance out of three; Diamond Imprest para drops Compensation Cess reference — DGFT Notifications 33/2026-27 and 32/2026-27
Two amendments to the Foreign Trade Policy 2023 dated 21 August 2026. Para 1.25(d) now lets an applicant (other than Gems & Jewellery) get One Star Export House status with export performance in any two of the three preceding financial years. Para 4.63 on Diamond Imprest Authorisation no longer refers to Compensation Cess, which stands discontinued from 1 February 2026.
Key facts
- In force
- With immediate effect from 21 August 2026
- Who it affects
- Exporters applying for One Star Export House status, status holders, Diamond Imprest Authorisation holders
- What it is
- Relief
- Section
- Foreign Trade
- Published
- 21 August 2026
In 30 seconds
- Notification No. 33/2026-27 amends Para 1.25(d) of the FTP 2023 with immediate effect.
- For One Star Export House status (other than the Gems & Jewellery sector), export performance in any two out of the three preceding financial years is sufficient.
- For other status categories the rule is unchanged: performance in all three preceding financial years (two for Gems & Jewellery).
- Notification No. 32/2026-27 amends Para 4.63 with immediate effect: the reference to Compensation Cess under section 3(9) of the Customs Tariff Act, 1975 is omitted.
- Exemption from the whole of Integrated Tax under section 3(7) on imports under Diamond Imprest Authorisation continues.
हिंदी में सार
DGFT ने 21 अगस्त 2026 की दो अधिसूचनाओं से विदेश व्यापार नीति 2023 में संशोधन किया है। Notification 33/2026-27 के अनुसार One Star Export House दर्जे के लिए (Gems & Jewellery को छोड़कर) पिछले तीन वित्त वर्षों में से किन्हीं दो में निर्यात प्रदर्शन काफ़ी होगा। Notification 32/2026-27 से Diamond Imprest Authorisation वाले पैरा 4.63 से Compensation Cess का उल्लेख हटाया गया है, क्योंकि यह उपकर 1 फ़रवरी 2026 से बंद है; Integrated Tax की छूट जारी है।
Before and now
Needed in all three preceding financial years (all two preceding years for Gems & Jewellery).
For One Star Export House other than Gems & Jewellery: any two out of the three preceding financial years.
Two amendments, one date
DGFT has issued two short notifications dated 21 August 2026 amending the Foreign Trade Policy (FTP) 2023, both with immediate effect: Notification No. 33/2026-27 on Para 1.25 (status holders) and Notification No. 32/2026-27 on Para 4.63 (Diamond Imprest Authorisation).
Para 1.25(d) — easier entry to One Star Export House
| Existing Para 1.25(d) | Revised Para 1.25(d) |
|---|---|
| For granting status, an export performance would be necessary in all the three preceding financial years (and in all the two preceding financial years for Gems & Jewelry Sector). | The same sentence, with a proviso added: for grant of One Star Export House status (other than for Gems & Jewelry Sector), export performance in any two out of the three preceding financial years shall be sufficient. |
The notification describes the effect: One Star Export House status can be granted to applicants, other than in the Gems & Jewelry sector, who have export performance in any two out of the three preceding financial years, subject to the other provisions of Para 1.25.
What does not change:
- the proviso is only for One Star Export House status — the main rule of performance in all three preceding years continues for the rest;
- the Gems & Jewelry sector is outside the proviso; its rule of performance in all the two preceding financial years stays as it is;
- the notification does not alter any other condition of Para 1.25.
Para 4.63 — Diamond Imprest Authorisation
Para 4.63 lists the duties from which imports under a Diamond Imprest Authorisation are exempt: Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping Duty, Countervailing Duty, Safeguard Duty and Transition Product Specific Safeguard Duty, wherever applicable.
| Last sentence of Para 4.63 | Text |
|---|---|
| Existing | Such imports are also exempt from the whole of the Integrated Tax and Compensation Cess leviable under sub-section (7) and sub-section (9) respectively of section 3 of the Customs Tariff Act, 1975. |
| Revised | Such imports are also exempted from the whole of the Integrated Tax leviable under sub-section (7) of section 3 of the Customs Tariff Act, 1975. |
The notification explains that the reference to exemption from Compensation Cess under sub-section (9) stands omitted because Compensation Cess has been discontinued with effect from 1 February 2026 on the recommendation of the GST Council in its 56th meeting. The exemption from the whole of Integrated Tax on imports under Diamond Imprest Authorisation continues to be available.
What exporters should do
- An exporter outside the Gems & Jewelry sector who was held back from One Star Export House status only because one of the three preceding financial years had no export performance can now be considered, if the other conditions of Para 1.25 are met.
- Diamond Imprest Authorisation holders need take no step on account of the Para 4.63 change: the list of exemptions is otherwise the same, and only the reference to a cess that is no longer levied has been removed.
Both notifications are issued with the approval of the Minister of Commerce and Industry.
Questions and answers
How many years of export performance are needed for One Star Export House status now?
Under the proviso added to Para 1.25(d) by Notification No. 33/2026-27, export performance in any two out of the three preceding financial years is sufficient for One Star Export House status, other than for the Gems & Jewelry sector.
Does the relaxation apply to Two Star and higher categories?
No. The proviso is worded only for grant of One Star Export House status. The main rule — export performance in all the three preceding financial years — remains in Para 1.25(d).
Does it apply to the Gems & Jewelry sector?
No. The proviso expressly excludes the Gems & Jewelry sector, for which the requirement remains export performance in all the two preceding financial years.
Has the IGST exemption on Diamond Imprest imports been withdrawn?
No. Notification No. 32/2026-27 states that exemption from the whole of the Integrated Tax leviable under section 3(7) of the Customs Tariff Act, 1975 on imports under Diamond Imprest Authorisation continues to be available. Only the reference to Compensation Cess under section 3(9) has been omitted.
Published 21 August 2026. Updated 10 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.