Context: The government decided to ease rules under the Advance Authorisation Scheme, allowing exporters to claim duty-free benefits even if goods were shipped before licence issuance, provided the Bill of Entry is filed post licence date.
About the Advance Authorisation Scheme
What It Is?
- A foreign trade policy initiative allowing duty-free import of inputs used in manufacturing export products.
- Administered By: Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry.
- Aim: To reduce input costs for exporters, thereby improving the global competitiveness of Indian goods.
Key Features of the Advance Authorisation Scheme
- Duty‑Free Import: Allows import of raw materials, packaging, fuel, oil, and catalysts without payment of Customs duties.
- Standard Input‑Output Norms (SION): Exports must conform to sector‑wise norms issued by DGFT. Exporters can seek ad‑hoc norms if SION doesn’t apply.
- Eligibility: Open to manufacturer exporters and merchant exporters linked with supporting manufacturers.
- Physical Incorporation Principle: Inputs must be physically consumed or used in the manufacture of the final export product.
Recent Relaxation under the AA Scheme
- Previous Rule: If goods were shipped before the AA licence was issued, duty exemption was denied even if the Bill of Entry was filed later.
- New Rule: Exporters can now avail benefits as long as the Bill of Entry is filed after licence issuance, regardless of shipment date.
- Restriction: Relaxation does not apply to restricted or canalised goods unless special DGFT approval is granted.
- Impact: Removes ambiguity, streamlines Customs clearance, and boosts exporter confidence amid rising logistics challenges.
Conclusion
The updated provisions under the Advance Authorisation Scheme mark a significant boost for Indian exporters, ensuring duty‑free benefits even amid shipping timing constraints. By simplifying Customs procedures and clarifying SION norms, this reform strengthens India’s export competitiveness on the global stage.
