AA

Advance Authorisation scheme enables duty free import of inputs for export production, including replenishment of inputs or duty remission Advance Authorisation covers manufacturer exporters or merchant exporters tied to supporting manufacturer(s).

Advance Authorisation Scheme:

Advance Authorisation is issued to allow duty free import of input, which is physically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, catalyst which is consumed / utilized in the process of production of export product, may also be allowed. Authorisation shall be issued in accordance with the Policy and Procedures in force on the date of issue of the Authorisation.

Advance Authorisation is issued for inputs in relation to resultant product, on the following basis:

• As per Standard Input Output Norms (SION) notified (available in Hand Book of Procedures); OR 1. On the basis of self declaration as per paragraph 4.07 of Handbook of Procedures. OR 1. Applicant-specific prior fixation of norm by Norms Committee as per para 4.06 of Handbook of procedures. OR 1. On the basis of Self Ratification Scheme in terms of para 4.06 of foreign trade policy.

The quantity of inputs allowed for a given product is based on specific norms defined for that export product, which considers the wastage generated in the manufacturing process. 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.

Advance Authorisation covers manufacturer exporters or merchant exporters tied to supporting manufacturer(s).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. Duty-free importable items under the scheme

The following items can be imported without payment of duty under this scheme:

• Inputs that are physically incorporated in the product to be exported after making normal allowance for wastage
• Fuel, oil, catalysts which are consumed or utilized to obtain the export product.

> Advance Authorisation for Spices:

Duty free import of spices covered under Chapter-9 of ITC (HS) shall be permitted only for activities like crushing / grinding / sterilization / manufacture of oils or oleoresins. Authorisation shall not be available for simply cleaning, grading, re-packing, etc.

• Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer,.
• Advance Authorisation for pharmaceutical products manufactured through Non-Infringing (NI) process (as indicated in paragraph 4.18 of Handbook of Procedures) shall be issued to manufacturer exporter only.

Advance Authorisation shall be issued for:

• Physical export (including export to SEZ)
• Intermediate supply; and/or
• Supply of goods to the categories mentioned in paragraph 7.02 (b), (c), (d), (e), (f) and (g) of this FTP.
• Supply of ‘stores’ on board of foreign going vessel / aircraft, subject to condition that there is specific Standard Input Output Norms in respect of item supplied

Export Obligation:

• Minimum value addition of 15%
• Period for fulfilment of export obligation - 18 months from the date of issue of Authorisation or as notified by DGFT.

• Input for exports exempted from payment of Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping Duty, Safeguard Duty and Transition Product Specific Safeguard Duty, wherever applicable.
• Exempted from IGST and Compensation cess.