Advance Authorization (also known as Advance Licence/License) is a scheme under the Foreign Trade Policy (FTP) of India that allows businesses to import raw materials, components, and other inputs duty-free, provided that these inputs are used to manufacture goods for export. This scheme promotes cost-effective production and export of goods by reducing the tax burden on exporters. Whether you are directly involved in production or sourcing products through a manufacturing partner, you can take advantage of the scheme to reduce costs.

CCC has a dedicated DGFT and customs advisory practice. The multidisciplinary team handling DGFT and customs matters, consists of qualified advocates, company secretary, trade experts, and professionals trained in business management. With over two decades of experience, CCC has provided its consulting services to various industrial houses, MNCs and PSUs on FTP. CCC has advised and assisted its clients on planning and structuring transactions to avail the range of schemes and benefits under the FTP.

Duty Exemption Scheme (Advance Authorisation)

Start Now

Who is Eligible for Advance Authorization?

Manufacturer exporters: Companies or individuals who directly manufacture and export products.

Merchant exporters: Exporters who are not manufacturers themselves but work with
supporting manufacturers to produce and export goods.

What is the process for availing Advance Authorization?

Application for grant of Advance Authorization can be made to the concerned Regional office of the DGFT in Form ANF 4A along with prescribed documents.

Imports of inputs shall be made within 12 months from the date of issuance of License.
Export of finished products shall be made within 18 months from the issuance date of License.

This allows enough time to both import necessary materials and complete the export process within a reasonable timeline.

What is the allowed timeline for import and export under the Advance License?

Yes, the time period can be extended:

Import: Extension of 1 year is possible upon payment of the required fee.
Export: Similarly, the export period can also be extended for 1 year.

Extensions are subject to approval and fees as prescribed by the FTP and the Handbook of Procedures (HBP).

Can the time period for import and export under Advance Authorisation be extended?

To avail the benefits of Advance Authorization, in general, exporters must achieve a minimum value addition of 15%. This means that the final export product should reflect at least a 15% increase in value over the value of inputs used. Para 4.9 of the FTP specifies specific value addition for certain other categories of products.

What is the Minimum Value Addition requirement?

Upon completion of export obligation, the authorization Holder should file the application for EODC in Form ANF 4F along with prescribed documents. On receipt of application, the concerned Regional Authority (RA) process the same and in case, any additional information / documents are required, they point out the same and communicate to the Authorization Holder. Once RA is satisfied with all the documents, EODC is issued.

How to apply for EODC for Advance Authorization?

Advance Authorization is issued for the following types of exports:

Physical Exports: Export of goods to foreign countries.
Intermediate Supply: Supply of inputs for the production of another export product.
Deemed Exports: Certain categories of supplies within India that are treated as deemed exports.
Supply of Stores: Providing goods and stores on board foreign-going vessels/aircraft.

This flexibility allows businesses to cover a wide range of export-oriented activities under the scheme.

Categories of Exports Eligible for Advance Authorization

Advance Authorization can be issued on the following bases:

Standard Input Output Norms (SION): Pre-determined input-output norms for specific products, set by DGFT.
Self-Declaration (Para 4.07 of HBP): Where SION is not fixed, exporters can self-declare input-output norms for their product.
Prior Fixation of Norms: In cases where norms need to be fixed before authorization, the applicant can approach the Norms Committee.
Self-Ratification Scheme (Para 4.06 of HBP): Allows authorized economic operators (AEOs) to self-ratify norms without approaching the Norms Committee.

To know more about fixation of input output norms read our blog-
https://www.consultancycounsel.com/post/advance-authorisation-fixation-of-input-output-norms

Basis for Issuance of Advance Authorization

Reach out to us.

Sign up to our newsletter

Get regular updates on schemes directly to your email!