Section 27 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.
Section 27 is the general refund provision. A person who paid or bore duty or interest can apply to the Assistant Commissioner or Deputy Commissioner within one year, with evidence that the incidence has not been passed on. If a refund is ordered, it is credited to the Fund unless the amount falls into one of the listed cases, in which case it is paid to the applicant.
This article follows the text on the CBIC portal updated to 30 March 2022 (the Act as amended up to the Finance Act, 2022), and then adds the change made to this section by the Finance Act, 2025. The Finance Act, 2023 could not be checked in full; see the section on later Finance Acts below.
Apply within one year from the date of payment of duty or interest, to the Assistant Commissioner or Deputy Commissioner of Customs. Since the Finance Act, 2025, an Explanation clarifies that the one year for a refund claim arising from a post-clearance revised entry (section 18A(3)(b)) or from an amendment of documents (section 149) runs from the date of payment of the duty or interest. The one-year limit does not apply where duty was paid under protest, and a refund claim of less than one hundred rupees is not refunded. The application must show that the incidence of the duty has not been passed on. An ordered refund goes to the Fund, except in the listed cases (such as importer who did not pass on incidence, personal-use imports, export duty and drawback), where it is paid to the applicant.
Sub-section (1): who applies, to whom and by when
Any person claiming refund of any duty or interest (a) paid by him, or (b) borne by him, may make an application in such form and manner as may be prescribed to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, before the expiry of one year from the date of payment of such duty or interest.
The words "borne by him" matter: the applicant need not be the person who paid the duty to the customs authorities. A buyer who bore it can apply. The form and manner are prescribed; the Customs Refund Application (Form) Regulations, 1995 are the regulations on the point, and the copy consulted is dated 11 May 1999. They say they are made under sub-section (1) of section 157; the form fields are not set out here.
The provisos and the Explanations to sub-section (1) add five points:
- Transitional proviso: an application made before the date on which the Finance Bill, 2011 received the assent of the President is dealt with under sub-section (1) as it stood before that date, in accordance with sub-section (2).
- Payment under protest: the limitation of one year does not apply where any duty or interest has been paid under protest.
- Small amounts: where the amount of refund claimed is less than rupees one hundred, it is not refunded. The footnote shows this proviso was inserted by Act 17 of 2013 (section 65) with effect from 10 May 2013.
- Explanation 1 (the existing Explanation, numbered 1 by the Finance Act, 2025): for a person other than the importer, "the date of payment of duty or interest" is read as "the date of purchase of goods" by that person.
- Explanation 2 (inserted by the Finance Act, 2025): for the removal of doubts, the period of limitation of one year in the case of a claim of refund under clause (b) of sub-section (3) of section 18A (a revised entry that results in excess duty paid) or of amendment of documents under section 149, is computed from the date of payment of such duty or interest. See our article on section 18A.
The footnotes show that sub-section (1) was substituted by Act 8 of 2011 (section 41) with effect from 8 April 2011. If you have a refund claim and want to confirm which clock applies, a legal consultation can help you test the date and the protest position.
Sub-section (1A): the evidence
The application under sub-section (1) shall be accompanied by such documentary or other evidence (including the documents referred to in section 28C) as the applicant may furnish to establish that the amount of duty or interest in relation to which the refund is claimed was collected from, or paid by, him and the incidence of such duty or interest has not been passed on by him to any other person. This is the unjust enrichment test in practice: the claimant must show that the incidence has not been passed on. Our article on sections 28C and 28D covers that section.
Sub-section (1B): when the one year starts
Save as otherwise provided in section 27, the period of one year is computed in the following manner:
| Clause | Case | Start of the one year |
|---|---|---|
| (a) | Goods exempt from payment of duty by a special order under section 25(2) | Date of issue of the order |
| (b) | Duty becomes refundable as a consequence of a judgment, decree, order or direction of the appellate authority, Appellate Tribunal or any court | Date of such judgment, decree, order or direction |
| (c) | Duty paid provisionally under section 18 | Date of adjustment of duty after final assessment, or, in case of re-assessment, date of re-assessment |
For the provisional assessment route, see our article on section 18. For special orders, see section 25.
Sub-section (2): the order and where the money goes
If, on receipt of an application, the Assistant Commissioner or Deputy Commissioner is satisfied that the whole or any part of the duty and interest, if any, paid on such duty, paid by the applicant is refundable, he may make an order accordingly, and the amount so determined shall be credited to the Fund. (The Fund is the Consumer Welfare Fund, as clause (21A) of section 2 defines it.)
The first proviso says the amount determined shall, instead of being credited to the Fund, be paid to the applicant if it is relatable to:
| Clause | Case |
|---|---|
| (a) | Duty and interest paid by the importer or the exporter, if he had not passed on the incidence to any other person |
| (b) | Duty and interest on imports made by an individual for his personal use |
| (c) | Duty and interest borne by the buyer, if he had not passed on the incidence to any other person |
| (d) | The export duty as specified in section 26 |
| (e) | Drawback of duty payable under sections 74 and 75 |
| (f) | Duty and interest borne by any other class of applicants as the Central Government may, by notification, specify |
| (g) | Duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made, where such excess payment is evident from the bill of entry in the case of a self-assessed bill of entry, or the duty actually payable is reflected in the re-assessed bill of entry in the case of re-assessment |
Clause (g) was inserted by section 92 of the Finance Act, 2017 (7 of 2017) with effect from 31 March 2017, as the footnote shows. The second proviso says no notification under clause (f) shall be issued unless in the opinion of the Central Government the incidence of duty and interest has not been passed on by the persons concerned to any other person.
Sub-section (3): the exclusive route
Notwithstanding anything to the contrary in any judgment, decree, order or direction of the Appellate Tribunal, National Tax Tribunal or any court, or in any other provision of the Act or the regulations or any other law, no refund shall be made except as provided in sub-section (2). The copy prints the words "National Tax Tribunal" with a footnote that they are to be inserted from a date to be notified; this article does not treat that Tribunal as functioning.
Sub-sections (4) and (5): clause (f) notifications
Every notification under clause (f) of the first proviso to sub-section (2) shall be laid before each House of Parliament, if sitting, as soon as may be after issue, and if not sitting, within seven days of re-assembly; the Government shall seek approval by a resolution moved within fifteen days beginning with the day on which the notification is laid before the House of the People. If Parliament modifies it or directs that it cease to have effect, it thereafter has effect only in modified form or is of no effect, without prejudice to the validity of anything previously done. Sub-section (5) declares that any such notification, including one approved or modified under (4), may be rescinded by the Central Government at any time by notification. The copy prints the number of sub-section (5) as "5)" without the opening bracket.
For interest on a refund that is not paid in time, see section 27A; for the practical side, see our post on customs refund grounds and the claim process.
A worked example with invented names
Ganga Plastics Pvt. Ltd. paid duty on 5 March and later found it was charged on a wrong value. It applies within one year from 5 March, with evidence that it did not pass the duty on to its customers. The Deputy Commissioner is satisfied that part of the duty is refundable. Because Ganga, the importer, did not pass on the incidence, the amount falls under clause (a) of the first proviso and is paid to Ganga rather than credited to the Fund. Had Ganga passed the duty on to its buyers in the price, clause (a) would not apply and any refund ordered would go to the Fund.
Changes made by later Finance Acts
| Finance Act | What changed | What the gazette prints about commencement |
|---|---|---|
| Finance Act, 2025 (No. 7 of 2025), section 94 | Sub-section (1): the existing Explanation is numbered Explanation 1; new Explanation 2 says the one-year limit for a refund claim under section 18A(3)(b) or for amendment of documents under section 149 is computed from the date of payment of the duty or interest | No date is printed in the clause. The Act received the assent of the President on 29 March 2025 |
| Finance (No. 2) Act, 2024 (No. 15 of 2024), section 105 | Does not change the text of section 27. It gives effect to a notification (G.S.R. 356(E) of 10 May 2023) for 1 April 2023 to 30 June 2023 and says refund of the duty so collected is made in accordance with section 27(2), on an application made on or before 31 March 2025 | Assent on 16 August 2024; the dates above are printed inside the clause |
The Finance Act, 2023 amendments to the Customs Act could not be checked in full, because only an extract of that Act was available. Check the current text on the CBIC portal before relying on any clause of this section.
Need help with a customs refund claim?
Refund claims are lost on dates and on proof that the duty was not passed on. Our legal consultation service can help you assemble the application and the evidence under section 27.
Key takeaways
- Apply to the Assistant Commissioner or Deputy Commissioner within one year from the date of payment, subject to (1B) and the protest proviso.
- Under Explanation 2 (Finance Act, 2025), the one year for a refund claim under section 18A(3)(b) or for amendment of documents under section 149 runs from the date of payment of the duty or interest.
- A claim of less than one hundred rupees is not refunded.
- The applicant must show the incidence has not been passed on.
- A refund is credited to the Fund unless it falls in clauses (a) to (g) of the first proviso.
- No refund can be made except as provided in sub-section (2).
Read next
- Section 27A: interest on delayed refunds
- Sections 26–26A: refund of export duty and import duty in certain cases
- Customs Refund: Grounds and Claim Process
- Section 18: provisional assessment of duty
Disclaimer: Based on the Customs Act, 1962 as published on the CBIC Tax Information Portal, updated to 30 March 2022 (amended up to the Finance Act, 2022), as consulted on 2 October 2026. The change made by the Finance Act, 2025 is added from its gazette text; the Finance Act, 2023 could not be checked in full, and the current rules, regulations and notifications should be checked. This article is general information, not legal advice; check the official text before acting.