What is Advance Authorisation
Advance Authorisation allows an exporter to import inputs that are physically incorporated into the export product — allowing for normal wastage — without paying customs duty. It also covers fuel, oil, catalysts and other consumables used in producing the export product. Because the benefit is tied to a specific product and export order, it works best when the input-output relationship is well defined and documented.
Who needs it
- Manufacturer exporters who import raw materials for goods they manufacture and export
- Merchant exporters with a tie-up to a supporting manufacturer
- Businesses looking to reduce landed input cost on export orders through duty-free sourcing
Documents Required
- IEC (Import Export Code)
- RCMC from the relevant export promotion council
- Standard Input-Output Norms (SION) reference, or a self-declared norms application where SION doesn't exist
- Export order or Letter of Credit
- Technical details of the inputs and the resultant export product
- Chartered Accountant certificate as required by the application form
Process
- Determine the Standard Input-Output Norms (SION) applicable to your export product.
- File the application (Form ANF 4A) with details of the inputs and the export product.
- DGFT issues the Authorisation, typically valid 12 months for making the imports.
- Import the specified inputs duty-free against the Authorisation.
- Manufacture and export the finished product within the export obligation period, typically 18 months.
- File the Export Obligation Discharge with proof of exports, and close the Authorisation / obtain the EODC.
FAQs
What if no SION exists for my product?
You can apply for ad-hoc norms fixation through the Norms Committee, which will determine the input-output ratio applicable to your product.
Is minimum value addition required?
Yes, a minimum value addition is generally required, typically around 15%, though this varies by product [TODO: confirm from policy docs].
Can an unutilised authorisation be surrendered?
Yes. An Authorisation, or the unused portion of it, can be surrendered, subject to paying the applicable duty with interest on the imports not utilised.
