Paragraphs 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Paragraph 2.15 of the Policy requires a firm or company under adjudication before the National Company Law Tribunal (NCLT) to inform the Regional Authority and the Tribunal of its outstanding obligations under the Policy's schemes, and treats those dues as part of the dues to the Government. Paragraph 2.61 allows the Settlement Commission in the Department of Revenue to decide cases of export obligation default, with an exception for matters before the NCLT. Paragraph 2.29A of the Handbook describes the statement the firm must file.
This article is based on the chapter-wise text of the Foreign Trade Policy, 2023 published on the DGFT website, as consulted on 2 October 2026; the copy carries no "updated up to" date. The procedure is taken from Chapter 2 of the Handbook of Procedures, 2023 as published on the DGFT website (file of July 2026), consulted on 2 October 2026. Later Notifications, Public Notices and Trade Notices should be checked before you act. The paragraphs say nothing of the insolvency law itself, and this article explains none of it. For a firm facing both a tribunal and a foreign trade default, a legal dispute resolution engagement can coordinate the two.
A firm coming under adjudication before the NCLT must inform the concerned Regional Authority and the NCLT of any outstanding export obligations or liabilities under the Policy's schemes. The outstanding duty saved amount with interest, any penalty under the Act and any other dues are counted as part of the dues to the Government (paragraph 2.15). The Settlement Commission can decide default cases with effect from 01.04.2005, but where the matter is under the NCLT, paragraph 2.15 applies (paragraph 2.61). The Handbook requires a statement of outstanding obligations to be filed before the start of the NCLT proceedings (paragraph 2.29A).
What the Policy says
Paragraph 2.15: a firm before the NCLT
Any firm or company coming under adjudication proceeding before the National Company Law Tribunal shall inform the concerned Regional Authority (RA) and the NCLT of any outstanding export obligations or liabilities under any of the schemes under the Policy.
The paragraph then says what is counted. The total outstanding duty saved amount or dues, along with interest, any penalty imposed under the Foreign Trade (Development & Regulation) Act, or any other dues, are "counted as part of the dues to the government against the said firm/company". Three points follow from the text:
- The duty to inform runs to two bodies: the Regional Authority and the Tribunal.
- The amount reported includes duty saved, interest, any penalty under the Act and other dues.
- All of it is classed as dues to the Government. The paragraph does not say how those dues rank against other claims before the Tribunal, and that question belongs to the insolvency law, not to the Policy.
The site's articles on the Insolvency and Bankruptcy Code deal with that law; for what a resolution plan must provide, see our article on section 30 of the Insolvency and Bankruptcy Code, 2016, and on the clean slate principle section 31 of the Code. They are not explained further here.
Paragraph 2.61: regularisation of export obligation default through the Settlement Commission
The heading speaks of "Regularization of EO default and settlement of Customs duty and interest through Settlement Commission". The text says: to assist firms that have defaulted under the Policy "for reasons beyond their control", and to facilitate merger, acquisition and rehabilitation of sick units, it has been decided to empower the Settlement Commission in the Department of Revenue to decide such cases also, with effect from 01.04.2005. The last sentence: "However, in cases where the matter is under the purview of the NCLT, Para 2.15 of the FTP shall apply."
Paragraph 2.61 does not set an application window, a fee, or the relief the Commission may give; those belong to the Customs law and the Commission's own rules. The Act has its own Settlement Commission provision, discussed in our article on sections 11A, 11B and 12 of the Foreign Trade (Development and Regulation) Act, 1992. The Policy itself is made under section 5 of the Act. The paragraph names no section of the Act.
What the Handbook requires
Paragraph 2.29A of the Handbook says any firm or company coming under NCLT proceedings shall prepare a summary statement of outstanding export obligations and liabilities under the schemes of the Policy. The statement is to indicate:
- the duty saved amounts and the applicable interest till the date of start of the proceedings before the NCLT;
- any penalty imposed under the Act;
- any other dues, such as fee.
The statement is submitted to the concerned RA and to the NCLT, before the start of NCLT proceedings, as part of the statutory filings. It must be accompanied by a statement of consumption of inputs or procurement of capital goods, attested by a chartered engineer or chartered accountant, together with other documentary details of any partial fulfilment of the export obligation claimed towards offsetting the duty saved amount.
| Item | Policy 2.15 | Handbook 2.29A |
|---|---|---|
| Who | A firm or company under adjudication before the NCLT | Any firm or company coming under NCLT proceedings |
| To whom | The Regional Authority and the NCLT | The concerned RA and the NCLT |
| What | Outstanding export obligations and liabilities under the schemes | Summary statement: duty saved and interest till the start date, penalty, other dues |
| Supporting papers | Not stated | Statement of consumption of inputs or procurement of capital goods attested by a chartered engineer or chartered accountant; details of partial fulfilment |
| Effect | Dues counted as dues to the Government | Filed as part of the statutory filings before the start of proceedings |
A practical example
Lakeview Alloys Pvt Ltd, an invented company, holds an authorisation with an export obligation only partly met. A creditor files before the NCLT. Under paragraph 2.15 the company must inform the Regional Authority and the Tribunal of the outstanding obligation, and Handbook paragraph 2.29A calls for a summary statement showing the duty saved amount and interest up to the date the proceedings begin, any penalty under the Act and other dues such as fee. A chartered engineer or chartered accountant attests the statement of input consumption or capital goods procurement, and the company attaches papers showing the part of the export obligation it has fulfilled, since the Handbook allows partial fulfilment to be set against the duty saved. Because the matter is before the NCLT, paragraph 2.61 says the Settlement Commission route does not displace paragraph 2.15; paragraph 2.15 applies.
Need help with a default or a tribunal filing?
When a tribunal and a foreign trade default arise together, the statement of dues, the proof of partial fulfilment and the response to the Regional Authority need to line up. Our team can help through a legal dispute resolution engagement.
Key takeaways
- A firm under NCLT adjudication must inform the Regional Authority and the NCLT of outstanding export obligations (paragraph 2.15).
- Duty saved with interest, penalty under the Act and other dues are counted as dues to the Government.
- The Settlement Commission can decide default cases with effect from 01.04.2005, but paragraph 2.15 applies where the matter is under the NCLT (paragraph 2.61).
- File the statement before the start of NCLT proceedings, with attested consumption or procurement details (Handbook paragraph 2.29A).
- The paragraphs say nothing of ranking of dues; that is for the insolvency law.
Read next
- Paragraph 2.14: penal action and the Denied Entity List
- Paragraphs 2.16 to 2.20: United Nations linked prohibitions
- Sections 11A, 11B and 12 of the Foreign Trade (Development and Regulation) Act, 1992
- Section 6 of the Foreign Trade (Development and Regulation) Act, 1992: Director General of Foreign Trade
Disclaimer: Based on the chapter-wise text of the Foreign Trade Policy, 2023 and the Handbook of Procedures, 2023 published on the DGFT website, and on the later Notifications named in this article, as consulted on 2 October 2026. The copies carry no "updated up to" date. Notifications, Public Notices, Trade Notices, the ITC(HS) schedules, Appendices and forms change often; the current text on the DGFT website should be checked before acting. This article is general information, not legal advice; check the official text before acting.