Advance Authorisation (Erstwhile Advance License) Scheme:
An Advance Authorisation (AA) is issued to allow duty free import of inputs, which are physically used / consumed in the export product (making normal allowance for wastage). In addition, fuel, oil, catalysts etc. which are consumed / utilised in the course of manufacture of export product are also allowed.
Duty free import of mandatory spares up to 10% of the CIF value of the (AA), which are required to be exported / supplied with the resultant product, are also allowed to be imported under Advance Authorisation.
Duty free import of diesel HSD / Fuel is allowed under Advance licensing scheme.
Advance Authorisations are issued on the basis of inputs and export items, as given under SION.
However, this can also be obtained on the basis of "Adhoc norms or self declared norms", as per para 4.07 of Handbook of Procedures (Vol. I).
Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s) for :
- Physical exports (including exports to SEZ);
- Intermediate supplies;
- Deemed Exports.
- Advance Authorisation is subject to Actual User Condition. i.e. it cannot be transferred or sold.
- Advance Authorisation and/or materials imported there under shall not be transferable, even after completion of export obligation.
However, the Authorisation holder will have the option to dispose off the product "manufactured out of the duty free inputs", once the export obligation is completed.
For Supplies of stores on board of the foreign going vessel / aircraft, subject to the condition that there is specific SION in respect of the item(s) supplied for import of inputs required in the manufacture of goods.
Annual Advance License :
This is a very good & flexible scheme in the FTP by DGFT. Under this scheme, exporter is free to import any raw material, required in export item, under one product group of export and has to account for it at the time of closure of license.
All Advance Authorisations are exempted from payment of following Duties:
- Basic Customs Duty.
- Additional Customs duty, Education Cess.
- Anti dumping duty.
- Safeguard duty, if any.
Export Obligation :
The period for fulfillment of the export obligation under Advance Authorisation shall be 18 months.
Import Validity :
The validity for Imports is 12 Months.
Value Addition :
Minimum Value Addition is 15%.
Approval of consumption of inputs, where Norms are not fixed (para 4.07) from DGFT is also under taken by us.
We undertake all cases of issuance of Advance Licenses / Annual Advance license, Invalidation Letter / ARO, E.O. period extension for export, Revalidation for import etc. etc.
On completion of import & export, redemption of the license is to be applied with export documents and original license.
We undertake all cases of Redemption / Redemption with clubbing facility of Advance License / Annual Advance License etc.