On 15 May 2026, the Central Board of Indirect Taxes and Customs (CBIC) issued Circular 24/2026, tightening the evidentiary standard for transaction-value declarations on export invoices. The circular, effective 1 June 2026, requires exporters to furnish contemporaneous purchase agreements, supplier price-lists, and arm's-length certification for contracts valued above ₹50 lakh.
Customs officers now have explicit authority to reject transaction-value claims and apply alternative valuation methods (comparable uncontrolled price, cost-plus markup) without prior notice if documentation is incomplete at the point of export filing. For mid-sized exporters and contract manufacturers, this shifts compliance from reactive (responding to post-clearance audits) to preventive (pre-shipment documentation).
Market signals
The May 2026 circular explicitly lists seven mandatory supporting documents: commercial invoice, purchase agreement, cost sheet, supplier letter confirming price, third-party arm's-length valuation (for related-party exports), currency-conversion evidence, and any price-adjustment clauses. Absence of even one triggers alternative-valuation assessment.
Exports between group companies or to overseas associates now require pre-clearance arm's-length certification from a SEBI-registered valuer or Big Four firm. The CBIC notes that 23% of export reassessments in FY25–26 centred on transfer-pricing understatement in captive-market contracts.
Customs commissionerates at major ports (Mumbai, Chennai, Bangalore, Nhava Sheva) are recruiting additional valuation officers. Preliminary reports from FIEO (Federation of Indian Exporters' Organisations) indicate 2–5 day inspection delays for documentation-incomplete shipments, blocking letter-of-credit release cycles.
Under the Customs Act 1962, transaction value remains the primary method, but Section 14 permits rejection if the seller and buyer are related and price is not arm's-length. The May 2026 circular operationalises this by requiring documentary proof at export time, not post-clearance. Reassessment now triggers duty demands with 18% interest per annum (RBI repo rate + 9%) backdated to invoice date. Vinayakam Consultants helps exporters conduct pre-shipment pricing audits, prepare arm's-length certification dossiers for related-party contracts, and flag documentation gaps 10–15 days before shipment to avoid port delays and reassessment risk.
Your action checklist
- Audit all active export contracts (particularly to related parties or captive markets) against the seven mandatory documents listed in CBIC Circular 24/2026; flag any missing purchase agreements, cost sheets, or supplier price confirmations by 5 July 2026.
- For exports valued above ₹50 lakh to group entities, engage a SEBI-registered valuer or Big Four firm to issue arm's-length certification before shipment; retain the report with your export file and customs broker's copies.
- Revise your export-pricing playbook to include contemporaneous currency-conversion evidence (bank statements, forward-contract confirmations, spot-rate screenshots) dated within 3 days of invoice issuance.
- Brief your customs broker and shipping team on the new documentation requirements; implement a 10-day pre-shipment checklist review to catch gaps before filing Bill of Export with Customs.
Frequently asked questions
The May 2026 CBIC Circular requires exporters to furnish contemporaneous purchase agreements, supplier price-lists, and arm's-length certification for contracts valued above ₹50 lakh. Seven mandatory supporting documents must now be provided at the point of export filing.
Related-party exports require pre-clearance arm's-length certification from a SEBI-registered valuer or Big Four firm. This addresses the CBIC's finding that 23% of FY25–26 reassessments involved transfer-pricing understatement in captive-market contracts.
Customs officers can reject transaction-value claims and apply alternative valuation methods (comparable uncontrolled price, cost-plus markup) without prior notice if documentation is incomplete at export filing.