Hi @guangyi ,

Try to add @ before the name of json file

databricks cluster-policies create --json @policy.json

Also make sure that you're escaping quotation marks like they do in below documenation:

Create a new policy | Cluster Policies API | REST API reference | Azure Databricks

{
  "name": "Test policy",
  "definition": "{ \"custom_tags.test_tag\": { \"type\": \"fixed\", \"value\": \"test_value\" } }\n"
}

In my case after these changes I was able to create policy: