Advance Authorisation Scheme:
Exporters may no longer be denied duty-free import benefits under the Advance Authorisation (AA) scheme simply because their goods were shipped before the licence was issued.
Changes:
- Even if goods have already been shipped or have arrived in India, they can still be cleared under an Advance Authorisation granted later by the DGFT, provided the importer files the Bill of Entry after the licence date.
- The relevant date for eligibility under the AA scheme is the date of filing the Bill of Entry.
- This is a legal Customs document submitted to Indian Customs to get the goods cleared, not the date of shipment from the foreign country.
- However, this relaxation won’t apply to restricted goods or products that can only be imported through designated government agencies, unless the DGFT gives special permission.
- Advance Authorisation is issued to allow duty-free import of input, which is physically incorporated in the export product (making normal allowance for wastage).
- The inputs imported are exempt from duties like Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping duty, Safeguard Duty and Transition Product-Specific Safeguard duty, Integrated tax, and Compensation Cess, wherever applicable, subject to certain conditions.
- An export obligation is usually set as a condition for issuing Advance Authorization.
- In addition to any inputs, packaging material, fuel, oil and catalysts which are consumed/utilized in the process of production of export products, are also allowed.
- The quantity of inputs allowed for a given product is based on specific norms defined for that export product, which considers the waste generated in the manufacturing process.
- The Directorate General of Foreign Trade (DGFT) provides a sector-wise list of Standard Input-Output Norms (SION) under which the exporters may choose to apply.
- Alternatively, exporters may apply for their own ad-hoc norms in cases where the SION does not suit the exporter.
- It is available to either a manufacturer exporter directly or a merchant exporter tied with a supporting manufacturer.
