What is Advance Authorisation Scheme?
The Advance Authorisation Scheme enables duty-free import of inputs required for manufacturing export products. These inputs include raw materials, consumables, and other items that are used or consumed during the production process. The scheme also accounts for wastage norms, ensuring that businesses can import sufficient quantities based on realistic manufacturing requirements.
The quantity of inputs allowed is determined as per the Standard Input Output Norms (SION) issued by the Directorate General of Foreign Trade. In cases where SION does not apply, exporters can request ad-hoc norms for their specific production needs.
What is Liability in Advance Authorisations?
Liability in Advance Authorisation refers to the legal responsibility of the authorisation holder (importer/exporter) to fulfill the conditions imposed after availing duty-free import benefits under the scheme.
Government allows you to import raw materials without paying customs dutyIn return, you are liable (responsible) to:
Use those inputs for manufacturing
Export the final product within the prescribed time
Follow all DGFT rules
Key Liabilities in Advance Authorisation
- Export Obligation (EO)
Must export finished goods made from imported inputs
Usually within 18 months
- Duty Liability (If Not Fulfilled)
If export obligation is not completed:
You must:
- Pay full customs duty
- Pay interest
- Face penalties
- Proper Utilization of Inputs
Imported goods must be used only for export production
Cannot be sold or diverted in the domestic market
- Compliance with Norms
Must follow SION (Standard Input Output Norms)
Maintain proper consumption ratio
- Documentation Liability
Maintain records of:
Imports
Production
Exports
Submit proof to authorities
- Time-Bound Responsibility
Complete export within allowed period
Apply for closure (EODC) on time
Key Reasons Why It is Necessary
1. Reduction in Import Costs
2. Boost to Export Competitiveness
3. Encourages Manufacturing & Exports
4. Cash Flow Management
5. Flexibility in Input Usage
6. Support for Various Exporters
7. Alignment with Government Export Policies
Who Can Apply for Advance Authorisation?
- Manufacturer Exporters
- Merchant Exporters tied with supporting manufacturers
- Businesses engaged in international trade and exports
Various Types of Advance Authorisation
1. Advance Authorisation for Physical Exports
2. Advance Authorisation for Intermediate Supply
3. Advance Authorisation for Deemed Exports
4. Advance Authorisation for Annual Requirement
5. Advance Authorisation based on Self-Declaration
6. Advance Authorisation based on SION (Standard Input Output Norms)
Key Benefits of Advance Authorisation Scheme
- Duty-free import of raw materials and inputs
- Reduction in overall production cost
- Improved profit margins in export business
- Enhanced global competitiveness
- Flexibility through SION and ad-hoc norms
Information Included in Advance Authorisation
- An Advance Authorisation issued by DGFT contains important details such as:1 Authorisation number and issue date
2 Name and address of the exporter/importer
3 Description of export product
4 Quantity and value of inputs allowed for duty-free import
5 Input-Output Norms (SION or self-declared norms)
6 Export obligation (quantity, value, and time period)
7 Port of registration and validity period
Advance Authorisation Procedure
The process to obtain Advance Authorisation involves the following steps:
- Application Filing: Submit an online application on the DGFT portal
- Selection of Norms: Choose SION or apply for ad-hoc norms
- Document Submission: Upload required documents and details
- DGFT Review: Authorities verify and process the application
- Issuance of Authorisation: Upon approval, licence is granted
- Import of Inputs: Import raw materials duty-free
Fulfil Export Obligation: Export finished goods within the prescribed time
Our Advance Authorisation Services Include
Application for Advance Authorisation License
SION Norms Consultation & Selection
Ad-hoc Norms Application Support
Documentation & DGFT Filing
Compliance Management & Redemption
Does Advance Authorisation Need Renewal ?
No, Advance Authorisation does not require renewal. However:
1 It is issued with a specific validity period
2 Export obligation must be fulfilled within the given timeline
3 Extensions may be granted in certain cases by DGFT
Required Documents for Advance Authorisation
To apply for Advance Authorisation, the following documents are generally required:
1 IEC (Import Export Code)
2 GST Registration Certificate
3 PAN Card of the applicant
4 Export product details and technical specifications
5 Input-output consumption details
6 Proforma invoice / purchase order
7 Digital Signature Certificate (DSC)
8 Bank details and cancelled cheque
Common Errors to Avoid
Avoid these common mistakes while applying:
1 Incorrect or incomplete application details
2 Wrong selection of Input-Output Norms
3 Mismatch in quantity/value of inputs
4 Delay in fulfilling export obligation
5 Improper documentation or missing attachments
6 Not maintaining proper records of imports and exports
Why Choose KSV Solutions?
- Expert guidance on DGFT schemes and policies
- Fast and accurate application processing
- Complete compliance and documentation support
- End-to-end assistance for exporter
Frequently Asked Questions (FAQs)
1 What is the validity of Advance Authorisation?
Generally, it is valid for 12 months for import and 18 months for export obligation (subject to policy updates).
2 Who can apply for Advance Authorisation?
Both manufacturer exporters and merchant exporters tied to supporting manufacturers can apply.
3 Can Advance Authorisation be transferred?
No, it is non-transferable, but the inputs can be used for the intended export production.
4 What happens if export obligation is not fulfilled?
The importer may be required to pay duties with interest and penalties.
5 Is GST applicable under Advance Authorisation?
Customs duty exemptions are available, but GST applicability depends on current regulations.
