What is the objective of introducing this scheme?
This scheme was introduced with intent to enable duty free Import of inputs for export production, including replenishment of input or duty remission.
What are the types of relaxations that are available to an exporter under this scheme?
1. Duty Exemption schemes
This scheme consists of the following:-
(a) Advanced Authorisation
(b) Duty Free Import Authorisation (DFIA)
2. Duty Remission Scheme
It consists of Duty Drawback scheme which is governed by the Department of Revenue.
What is Advanced Authorization scheme?
The Advance Authorization Scheme is a scheme where the import of inputs will be allowed to be made duty-free (after making normal allowance for wastage) if they are physically incorporated in a product which is going to be exported. An export obligation is usually set as a condition for issuing Advance Authorisation.
Which Duties are exempt under the Advance Authorization Scheme?
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.
What is the Eligibility for availing Advance Authorization?
The Advance Authorization Scheme is available to either a manufacturer exporter directly or a merchant exporter tied with a supporting manufacturer. The authorization is available for the following:
• Physical exports
• Intermediate supply
• Supplies made to specified categories of deemed exports
• Supply of ‘stores’ on board of a foreign going vessel/aircraft provided that there are specific Standard Input Output Norms (SION) in respect of items supplied.
What is the validity period of Advance Authorization?
Advance Authorization is valid for 12 months from the date of issue of such Authorization. However, the export obligation may be fulfilled within 18 months from the date of issue of Authorization or as notified by the DGFT. Unless specified, the export proceeds should be realized in freely convertible currency.
What is Duty Free Import Authorisation Scheme (DFIA)?
Duty Free Import Authorisation is issued to allow duty free import of inputs. In Addition, it also includes import of oil and catalyst which is consumed in the process of production of export product.
Certain provisions that are related with FTP will also be applicable to the DFIA.
Which Duties are exempt under the Duty Free Import Authorization Scheme (DFIA)?
Duty Free Import Authorisation Scheme shall be exempted only from the Basic Custom Duty. Additional Customs duty/excise duty are not exempted and shall be adjusted as CENVAT credit as per DOR rules.
What is the eligibility for availing Duty Free import Authorisation scheme?
1. It shall be issued on post export basis for products for which Standard Input Output Norms have been notified.
2. Merchant exporter will be required to mention the name and address of supporting manufacturer of export on various documents of export such as a Shipping bill/ Airway bill/bill of export/ARE-1/ARE-3.
3. Application is required to be filed with the concerned regional Authority.
What is the validity period of Duty Free Import Authorization scheme (DFIA)?
The export should be completed within a period of 12 months from the Date of online filing of application and generation of file number.
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CS Riya Khurana
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Contact No.: 8810649870
