An Advance Authorisation Scheme allows duty free import of inputs, which are physically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, energy, catalysts which are consumed / utilised to obtain export product are also allowed.
ELIGIBILITY:
(a) Manufacturer exporter or merchant exporter tied to supporting manufacturer(s) for duty-free imports of inputs.
(b) Physical exports (including exports to SEZ)
(c) Supply of Goods to ultimate exporter holding another Advance Authorisation / Duty Free Import Authorisation.
(d) Intermediate supplies
(e) Supply of goods covered under Deemed Exports
(f) Supply of “stores” on board of foreign going vessel / aircraft subject to condition that there is specific SION in respect of item(s) supplied.
INCENTIVE:
Duty free import of mandatory spares upto 10% of CIF value of Authorisation which are required to be exported / supplied with resultant product are allowed under Advance Authorisation. Advance Authorisations are issued for inputs and export items given under SION.
ADVANTAGES:
(i) Basic customs duty,
(ii) Additional customs duty including Education cess,
(iii) Anti- dumping duty, and Safeguard duty
ADVANCE LICENSE:
An advance licence is granted for the import of inputs without payment of basic customs duty. Such licences shall be issued in accordance with the policy and procedure in force on the date of issue of the licence and shall be subject to the fulfillment of a time-bound export obligation, and value addition as maybe specified. Advance licences maybe either value based or quantity based.As per the latest amendments to the EXIM Policy, the facility of Back to Back Inland Letter of Credit has been introduced, to enable an Advance Licence holder to source his inputs from domestic suppliers.
VALUE BASED ADVANCE LICENSE
Under a value based advance licence, any of the inputs specified in the licence maybe imported within the total CIF value indicated for those inputs, except inputs specified as sensitive items.Under a value based advance licence, both the quantity and the FOB value of the exports to be achieved shall be specified. It shall be obligatory on the part of the licence holder to achieve both the quantity and FOB value of the exports specified in the licence.
AMENDMENTS TO THE ADVANCE LICENSE SCHEME
(i) Modvat credit can be taken on inputs which go into the manufacture of export products, under the Advance License Scheme.
(ii) Expansion of the concept of Advance Intermediate License, which hitherto was only quantity based to value based.
(iii) Advance licenses can now be transferred after the export obligation has been fulfilled, and the bank guarantee or LUT redeemed.
(iv) Drawbacks are permitted in respect of duty paid materials, which are imported or indigenous.
(v) Import of mandatory spares upto 5% of the CIF value of the license is now allowed.
(vi) The list of sensitive items has been pruned. Flexibility has also been granted to the exporter for using the unutilized CIF value of sensitive items for importing non-sensitive items.