Revalidation & Extension In The Export Obligation Period Of Advance Licence/ Authorization Guide

Understanding Advance Authorization for imports can be complex. This blog will simplify key aspects, including the validity period, revalidation process, and export obligation period (EOP). You'll learn how to apply for revalidation, extend EOP, and handle specific scenarios like export restrictions or special conditions during the COVID-19 pandemic. By the end, you'll have a clear grasp of managing Advance Authorizations for efficient import and export operations.

1. What is the validity period for Import under Advance Authorisation?

Validity Period for Import under Advance authorization is 12 months from the date of issue of Authorization. Validity of Advance Authorizations for supplies under Chapter 7 of Foreign Trade Policy (Deemed Exports) is co-terminus with contracted duration of project execution or 12 months whichever is later.

2. What is Revalidation of Advance Authorization and for much time advance authorization can be revalidated?

Revalidation is extension in validity period of Imports under Advance Authorizations. For Advance Authorizations other than Advance Authorizations issued for Deemed Exports, only one revalidation for twelve months from the date of expiry of validity of Advance Authorization is allowed.

3. How can I apply for revalidation of advance authorization?

Application for revalidation is submitted online to the concerned Regional Authority (RA).

4. What is Export Obligation Period (EOP) of Advance Authorizations?

Period allowed for fulfilment of Export Obligation under Advance Authorization is 18 months from the date of issue of Authorization. Export Obligation Period under Advance Authorization commences from the date of issue of Authorization, which means Advance Authorization holder can start their export from the date of issue of Authorization and such exports will be counted towards fulfilment of Export Obligation under Advance Authorization.

Advance Authorizations issued for supplies to projects in India under Chapter 7 of FTP (Deemed Exports) or projects abroad, export obligation period is co-terminus with contracted duration of the project execution or 18 months whichever is more. 

Export Obligation for items falling in categories of defence, military store, aerospace and nuclear energy is 24 months from the date of issue of Authorization or co-terminus with contracted duration of export order whichever is more.

5. For how much time EOP can be extended for Advance Authorizations?

Two Requests for 6 months each for extension in EOP is allowed. Such request is submitted to the concerned RA in Form ANF 4D.

Composition Fees as per below table is required to be paid to the RA for extension on EOP.

For 1st request of extension in EOP for 6 months, composition fees are as under – 

CIF value of Advance Authorization	Composition Fees (INR)
Up to Rs. 2 Crore	5,000
More than Rs. 2 Crore to 10 Crores	10,000
Above Rs. 10 Crore	15.000

For 2nd request of extension in EOP for 6 months, composition fees are as under – 

CIF value of Advance Authorization	Composition Fees (INR)
Up to Rs. 2 Crore	10,000
More than Rs. 2 Crore to 10 Crores	20,000
Above Rs. 10 Crore	30,000

Authorization Holder is required to submit a self-declaration to the RA along with each request for extension in EOP stating that unutilized imported / domestically procured inputs are available with the applicant. 

6. What is Appendix 4J?

Under Appendix 4J, different EOP is provided for some specified Inputs with Pre-import Condition under Advance Authorizations

7. For how much time EOP can be extended for Advance Authorizations issued under Appendix 4J?

EOP can be extended for Advance Authorizations issued under Appendix 4J for a maximum period of not more than half of the stipulated export obligation period.

For e.g., EOP is 6 months for a specified item, then EOP for such specified item can be extended for a maximum period of three months.

Composition fees to be levied in above case is given as under - 

CIF value of Advance Authorization	Composition Fees (INR)
Up to Rs. 2 Crore	5,000
More than Rs. 2 Crore to 10 Crores	10,000
Above Rs. 10 Crore	15,000

8. What is the provision for extension in Export Obligation period for the products on which ban / restriction is imposed on their exports?

Export Obligation period of Advance Authorization for such products on which ban / restriction is imposed on their exports will be extended automatically for the period equivalent to the duration of ban / restriction without any composition fees.

However, such Advance Authorization should have been issued prior to the imposition of ban.

9. What will be extended EOP / revised EOP for the Advance Authorizations for which EOP has expired between 01.02.2020 and 31.07.2020.

For all advance authorizations for which EOP has expired between 01.02.2020 and 31.07.2020, the EOP is automatically extended by 6 months from the date of expiry.

No application and composition fees are required to be submitted for the above said extension.

10. What will be extended EOP / revised EOP for the Advance Authorizations for which EOP / extended EOP has expired between 01.08.2020 and 31.07.2021.

For all advance authorizations for which EOP has expired between 01.08.2020 and 31.07.2021, the EOP will be valid till 31.12.2021 without any composition fees.

However, to avail the above extension, authorization holder needs to fulfil addition 5% export obligation in value terms on the balance export obligation on the date of expiry of original / extended EOP.

11. What will be the composition fees for extension in EOP for the cases approved by Policy Relaxation Committee (PRC)?

As explained above, authorization holder can apply to RA only for two extensions in EOP of 6 months each. If any authorization holder wishes to avail further EO extension beyond two extensions of 6 month’s each, then the authorization holder can apply to PRC along with detailed reasons for such extension applied. 

In such cases, if PRC allows the EOP extension, then generally a condition to pay the composition fees is levied on the authorization holder. The composition fees to be paid in such cases is as under – 

CIF value of Advance Authorization	Composition Fees (INR)
Up to Rs. 2 Crore	25,000
More than Rs. 2 Crore to 10 Crores	50,000
Above Rs. 10 Crore	1,00,000

12. Does Custom Authority allow the clearance of export consignment in case EOP is expired and Authorization holder has applied for EOP extension to the RA?

Customs may allow provisional clearance of export consignment as and when authorization Holder produces documentary evidence of having applied for EOP extension to the concerned RA.

Conclusion

Navigating Advance Authorization requirements is crucial for seamless import and export activities.

By understanding the validity periods, revalidation processes, and export obligation extensions, businesses can ensure compliance and optimize their operations.

Stay informed about specific provisions and updates to maximize the benefits of Advance Authorizations and maintain smooth trade practices.