Advance authorization scheme

Advance authorization scheme

News: Recently, The Directorate General of Foreign Trade (DGFT) has implemented the Advance Authorisation Scheme under the Foreign Trade Policy.

What is Advance authorization scheme?
• Advance authorisation scheme is a scheme for the exporters that allows them to import raw materials and other inputs duty free (after making normal allowance of wastage) if they are physically incorporated in a product that is going to be exported.

Key Features:
• The scheme is available to manufacturer exporters or merchant exporters tied to supporting manufacturers.
• The scheme covers physical exports, intermediate supplies, deemed exports, and supply of stores on board of foreign going vessels/aircrafts.
• The scheme is based on standard input output norms (SION) that specify the quantity of inputs allowed for a given export product.
• The scheme involves an export obligation that requires the exporter to export the resultant product within a specified period (Valid for 12 months)
• The scheme exempts the imported inputs from duties like basic customs duty, additional customs duty, education cess, anti-dumping duty, safeguard duty, integrated tax, and compensation cess.