{"id":41111,"date":"2022-03-15T11:23:56","date_gmt":"2022-03-15T05:53:56","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=41111"},"modified":"2022-03-15T11:25:11","modified_gmt":"2022-03-15T05:55:11","slug":"advance-authorisation-for-importers-exporters","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/","title":{"rendered":"Advance Authorisation for Importers\/Exporters \u2013 An Overview"},"content":{"rendered":"\n<p class=\"has-drop-cap\">It&#8217;s\nalways important to maintain the value of exports and imports, i.e., the value\nof exports should be more than the value of imports. The Government of India\nhas introduced various schemes to boost exports made by the country. All the\nactivities related to import and export are governed by the <strong><em>FTP\nor Foreign Trade Policy<\/em><\/strong>, which is intended at increasing the exports of\nthe country and using trade expansion as an effective instrument of economic\ngrowth &amp; employment generation. The current Foreign Trade Policy intends to\nkeep in line with the <strong><em>Make in India<\/em><\/strong> vision and supports\nexports made by the <strong><em>SEZs or Special Economic Zones, EOUs or Export Oriented Units<\/em><\/strong>,\netc. Scroll down to check more information regarding the Advance Authorisation\nfor Importers or Exporters.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#What_is_the_Advance_Authorisation_Scheme\" >What is the\nAdvance Authorisation Scheme?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#Who_is_eligible_for_this_scheme\" >Who is\neligible for this scheme?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#Advance_Authorisation_for_Annual_Requirement\" >Advance\nAuthorisation for Annual Requirement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#Documents_Required_for_Obtaining_Advance_License_from_DGFT\" >Documents\nRequired for Obtaining Advance License from DGFT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#How_can_you_apply_for_the_Advance_Authorisation_Scheme\" >How can you\napply for the Advance Authorisation Scheme?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#Validity_of_Advance_Authorisation\" >Validity of\nAdvance Authorisation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#Actual_User_Condition_for_Advance_Authorisation\" >Actual User\nCondition for Advance Authorisation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#What_are_the_Various_Grounds_for_Issuing_Advance_Authorisation\" >What are the\nVarious Grounds for Issuing Advance Authorisation?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#Export_Obligation_under_Advance_Authorisation_Scheme\" >Export\nObligation under Advance Authorisation Scheme<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/corpbiz.io\/learning\/advance-authorisation-for-importers-exporters\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Advance_Authorisation_Scheme\"><\/span>What is the\nAdvance Authorisation Scheme?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nAA or Advance Authorisation is a duty exemption scheme for exporters\nfacilitated by the Government of India. It&#8217;s offered through the DGFT or\nDirectorate General of Foreign Trade and incentivises the import of required\nraw materials &amp; additives that are physically incorporated into a product\nthat is bound for exports. There can be fuel, power, catalysts, or oil consumed\nin the production of the export items. The Advance Authorisation Scheme makes\nthe import of such inputs duty-free. The scheme also permits a normal allowance\nfor the wastage of these inputs. Notification regarding the products or being\nexcluded\/included from the ambit of Advance Authorisation is released as and\nwhen needed by the DGFT in the form of public notices.<\/p>\n\n\n\n<p>AA\nScheme has been referred to as an Advance License in some places as well. The\ninput or output connection is set up based on guidelines given in the scheme,\nas are the eligibility, the value addition criteria &amp; several other aspects\nrelated to the scheme.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_is_eligible_for_this_scheme\"><\/span>Who is\neligible for this scheme?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Benefits\nof Advance License can be availed of by the merchant exporter or manufacturer\nexporter association with the supporting manufacturer. It&#8217;s also available to\nsub-contractors or projects where the name of the sub-contractor is mentioned\nin the contract, in an instance of supply to the UN (United Nations) or other\naid programs. Payment for such types of contracts should be received in freely\nconvertible foreign exchange. <\/p>\n\n\n\n<p>It&#8217;s\nissued for physical exports such as exports to SEZs, intermediate supplies, and\nsupply of stores on-board aircraft or vessels, subject to conditions. Import of\nobligatory spares, if required to be given with the exported item, is covered\nunder the duty-free advantage to a maximum of 10% of the CIF value of\nAuthorisation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advance_Authorisation_for_Annual_Requirement\"><\/span>Advance\nAuthorisation for Annual Requirement <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>AA\nis also available as an annual requirement, but only for products notified in\nthe SION, except where the item or product of input appears in Appendix 4J of\nthe Handbook of Procedures 2015-20. To be eligible for the AA annual\nrequirement, an exporter should have the export performance for at least the\nlast two Financial Years. The FOB value of the export realised should be more\nthan 15% of the CIF Value of the input covered by the Advance Authorisation\nScheme.<\/p>\n\n\n\n<p>Under\nthe annual requirement, the amount eligible for the import of raw materials\nwould be 300% of FOB Value physical export or FOR Value of deemed export\/Rs. 1\ncrore, whichever is higher.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_Required_for_Obtaining_Advance_License_from_DGFT\"><\/span>Documents\nRequired for Obtaining Advance License from DGFT<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nare some vital documents required for obtaining an Advance License from DGFT:<\/p>\n\n\n\n<ol><li>DGFT DSC;<\/li><li>Copy of valid RCMC;<\/li><li>Copy of <a href=\"https:\/\/corpbiz.io\/iec-registration\"><strong>IEC License<\/strong><\/a>;<\/li><li>Copy of EHC or Export House Certificate (if required);<\/li><li>Application Form ANF-4A;<\/li><li>Copy of <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST Registration Certificate<\/strong><\/a>;<\/li><li>Copy of MSME or IEM or SSI.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_can_you_apply_for_the_Advance_Authorisation_Scheme\"><\/span>How can you\napply for the Advance Authorisation Scheme?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You\nhave to visit the official portal of DGFT and file the application of the\nAdvance Authorisation (AA) and this process is totally online now.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Validity_of_Advance_Authorisation\"><\/span>Validity of\nAdvance Authorisation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Advance Authorisation is valid for 12 months from the issuance date of such Authorisation. In the case of deemed exports, the Authorisation is associated with the contracted duration of project execution\/12 months from the date of issuance, whichever is more. However, the export obligation may be executed within 18 months from the date of issue of Authorisation or as informed by the <strong>DGFT<\/strong><sup><a href=\"https:\/\/www.dgft.gov.in\/CP\/\"><strong>[1]<\/strong><\/a><\/sup>. Unless specified, the export proceeds should be realised in freely convertible currency.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Actual_User_Condition_for_Advance_Authorisation\"><\/span>Actual User\nCondition for Advance Authorisation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nAA issued and the materials imported thereunder will be with original or actual\nuser condition. This means that the actual user may import such goods alone.\nThe Authorisation will not be transferable even after the accomplishment of\nexport obligation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Various_Grounds_for_Issuing_Advance_Authorisation\"><\/span>What are the\nVarious Grounds for Issuing Advance Authorisation?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>AA\ncan be issued for inputs used in the product that is to be exported on the\nbasis of the following grounds:<\/p>\n\n\n\n<ol><li><strong><em>SION or Standard Input Output\nNorms notified<\/em><\/strong>: The DGFT, on the\nrecommendation or suggestion of the Norms Committee, issues standard or usual\nnorms that define the amount of input needed in the manufacture of a unit of\nthe final product or item that will be exported. It&#8217;s available for a broad\nrange of items or products.<\/li><li><strong><em>Self-Ratification Scheme<\/em><\/strong>:\nAA under this scheme is only available to an exporter who holds the <strong><em>AEO\nCertificate <\/em><\/strong>under the Common Accreditation Programme (CAP) of CBEC. This\nscheme can be selected for when there is no SION or valid ad-hoc norms for an\nexpert product and also where SION has been informed; however, the exporter\nwants to use extra inputs in the manufacturing process. Ratification by the\nnorms committee is not needed under this scheme&amp; the regional authority may\ngrant AA upon fulfilment of the relevant conditions.<\/li><li><strong><em>Self-Declaration<\/em><\/strong>:\nAt times, the SION is not available for a specific product. In such a\ncondition, an application may be made to the Regional Authority, who will issue\nthe AA upon review.<\/li><li><strong><em>Application prior to fixation\nof the standard norm by the Norms Committee<\/em><\/strong>: There\nis another option for an exporter where the SION is not defined to make an\napplication to the norms committee, requesting the same. After giving all the\nvital data to the committee, they shall endeavour to either fix these norms or\nfacilitate ad-hoc norms on the basis of the application made. Such ad-hoc norms\nare valid for one Authorisation only &amp; no-repeat authorisations can be\nissued.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Export_Obligation_under_Advance_Authorisation_Scheme\"><\/span>Export\nObligation under Advance Authorisation Scheme<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For\nbeneficiaries of AA, there is an EO or Export Obligation in terms of the\nexports&#8217; value that should be fulfilled within a particular time frame. The\nExport Obligation is mentioned in the Authorisation itself and not achieving it\nin time can lead to penalties. Once the Export Obligation is met, one has to\nretain evidence of the same and provide it when needed. The period specified is\neighteen months from the issuance date of the Advance Authorisation, but it can\nvary from inputs like supplies to turnkey projects, military, defence, etc.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>So, the overall reason behind allowing duty-free inputs is to enhance exports. The company will incorporate these acquired inputs into a product so that it may be exported. In the case of AA, the Export Obligation is the value of export that requires to be achieved within a prescribed time period compulsorily.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our Article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/duty-free-import-authorization-scheme\/\">Duty Free Import Authorization Scheme \u2013 An Overview\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>It&#8217;s always important to maintain the value of exports and imports, i.e., the value of exports should be more than the value of imports. The Government of India has introduced various schemes to boost exports made by the country. All the activities related to import and export are governed by the FTP or Foreign Trade [&hellip;]<\/p>\n","protected":false},"author":35,"featured_media":41113,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[165],"tags":[2181],"acf":{"service_id":"16"},"authorName":"Karan Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/processed-1-150x150.jpeg","authorDescription":"A legal writing enthusiast, a wanderer, and a zealous reader. After gaining a lot of knowledge about the diverse legal topics and developing research skills, Karan joined the league of legal content writers to deliver quality-rich blogs.","postViews":5196,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/41111"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=41111"}],"version-history":[{"count":8,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/41111\/revisions"}],"predecessor-version":[{"id":41120,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/41111\/revisions\/41120"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/41113"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=41111"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=41111"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=41111"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}