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Advance Authorisation (Advance licence)


Import and Export is a wealthy field of business and if done right can make you millions, but it does have its drawbacks. The biggest setback is the rules/fees/authorizations, since you are doing business with another country, the Indian government has a definite set of rules you must follow to make the sale or purchase. This set of rules make most people pull back from the thought of running an import-export business. However, once you are into it, the rules seem friendly and the only thing you see is growth. Talking about growth, the Government of India, to boost imports, exports, launches various schemes from time to time to attract businessmen towards the field and one such scheme is the Advance Authorisation Scheme.

What is the AAS (Advance Authorisation Scheme)? What are its benefits? How can you enroll in it? Who is eligible? These are some of the questions we will try and answer within this blog. If you want, you can also connect with us directly, according to our clients we are the best Advance Authorisation Scheme consultants in India. Without further ado, let’s start with the basics.

What is the Advance Authorisation Scheme? Who is it for?

Imagine you run a restaurant chain, when you are selling an item you are paying a fee to the government. When you are buying raw material to create that food item you are again paying a huge fee to the government. A fee on both ends would mean little or no incentive for you, right? Now let’s transfer this example to manufacturers who export certain products from India.

The Advance Authorisation Scheme is for those exporters who need to import raw material to create an exportable good, i.e, the raw material they require to manufacture their goods and make them export-ready, whether it’s packing, fuel, oil, etc. is to be imported from a 2nd country.

advance authorization
Why is it needed?

Now, in a general case scenario, anyone who is importing anything from another country will have to pay import duty on the item and anyone who has to export something will also be liable to show the income amount and pay taxes accordingly. If this case would be applied to exporters who fall in the category mentioned above, they would be at a huge loss, since they would be paying duties at both ends. To help such exporters, the Government of India launched the Advance Authorisation Scheme so that they do not have to pay duties on both ends.

According to this scheme, such exporters would get duty-free imports of material that is used in manufacturing their goods. But, the quantity of such imports is fixed by the GOI for a certain amount of manufactured goods. The DGFT has created a whole list of such exported material that requires a certain material, in certain quantities to be imported. This list has Standard Input-Output Norms (SION) that the investors can apply to.

What are the requirements?

Well, first you should have an IEC and other requisites as mentioned under the Foreign Trade Policy, Chapter 4, the policy has all other details required to take benefit of the Advance Authorisation Scheme. But this can prove to be very exhausting for exporters since there are multiple documents needed, multiple licenses, and more, failing at any of this can lead to rejection of the import license. So, it would be good if you get help from the best Advance Authorisation Scheme consultants in India.

What are the benefits of the Advance Authorisation Scheme?

The most important benefit is that you get exemption from multiple taxes, here is the list of those:

  • Education Cess
  • Anti-Dumping Duty
  • Basic Customs Duty
  • Additional Custom Duty
  • Countervailing Duty
  • Safeguard Duty
  • Duty Drawback (in certain cases where input is not mentioned in norms)
  • Integrated Tax and Compensation Cess
What is the basis of Advance Authorisation?

Here, we have listed the basis on which you can take benefit of the Advance Authorisation Scheme.

1. Inputs according to the SION

DGFT has issued certain norms and quantities for all the exports that can take benefit of the inputs, and you can use this list and norms to make the best from the scheme.

1. Self-Declaration

This is very important. Suppose the above norms do not have the list of raw materials or the right quantity of inputs you need for manufacturing. In this case, you can file a self-declaration with the number of inputs you need for x amount of manufactured goods. The RA will process the authorization and you will get to import the inputs duty-free. But, the norms committee will check and approve the claims made by you.

These two options are used very commonly and are available to all exporters who need to claim inputs under the Advance Authorisation Scheme.

Of course, all of this requires a lot of licenses and mandates and again if you need help with these, you can connect with the best Advance Authorisation scheme consultants in India.

At Enrich Services What We Do

The factors used in the manufacturing process of the export product could be eligible for getting imported under the scheme. We help in the identification of the eligibility and gaining the benefits of AA. We go through the different functioning processes or norms followed to acquire the AA. Furthermore, there is guidance in the requirement and compliance followed by the Clients once the authorization is issued. Getting Redemption Letter from DGFT RA and release of Bond/BG after fulfilling the export obligation from Customs.

FAQ's

Frequently Asked Questions on Importer-Exporter Code (IEC)/(E-IEC)


Q.1. How to apply for Advance Authorisation (AA)?

Ans. The steps to apply for Advance Authorisation are as follows.

  • Register on the official DGFT Website via https://www.dgft.gov.in/.
  • Then, link your existing IEC, if any.
  • After that, navigate to My Dashboard & click on View & Register Digital Signatures Token.
  • Once your registration is complete, you can apply for the scheme under the Services Column.

Q2. Where to apply for AA?

Ans. You can find the link on the DGFT website, https://www.dgft.gov.in/. Here, under the service section, you will get the link to apply for Advance Authorisation.

Q.3. How to link the norms agreed upon by the committee in your AA application form?

Ans. You can link the norms agreed upon by the committee in your AA application form by following the steps below.

  • Click open your AA application form and go to the export details menu.
  • You will find a section stating the norms of the committee meeting, where you can click on the yes or no options.
  • Of course, click yes if the meeting took place before 2020, but the digitized export details are not present in the system.
  • When you click yes, you will get columns to enter the meeting number, date, & HQ file number. Once you enter this information, you will get directed to file the export item grid following the approved norms by the committee.
  • If you select no, meeting details may reflect in the grid and to input the export items, you have to tap on the view export link button from the list of approved files existing in the system. Make sure the export & input items correspond!
  • Here, you have hit the add button to add all export items to the grid.
  • You have to edit each item present in the grid and re-enter the requisite quantities respectively.
  • Depending on the entered export item details and approved norms by the committee, the following direction shall pop on the screen.

Q.4. What is the required minimum value addition for advance authorization?

Ans. You need to add a minimum value of 15% for Advance Authorisation. However, there are export products, where you can give less than 15% value addition, and they are stated in Appendix 4D. Besides, tea export requires a minimum value addition of 50%.

Q.5. How can you add invalidation and indigenously procured item or supplier details in your AA application form?

Ans. When you want to add details regarding invalidation, please follow the steps given below.

  • Open your AA application form and tap the Additional Input button.
  • Under the invalidation details menu, hit the select input item and tick & add the item accordingly in the grid.
  • Tap the edit icon for the added items and enter the quantity to be invalidated.
  • Click on Save.

Whereas, to enter Indigenously Procured Items or Supplier details, follow these steps.

  • Tap on the Ingenious Supplier details or SEZ supplier details option.
  • Select the input items from the drop-down box, the one for which you want to add supplier details.
  • Enter the quantity for procurement respectively and click add.
  • Now, you can add all requisite supplier details, like IEC or Branch Code.
  • Once done, tap Add to save.

Q.6. How can you input wastage claim details for any existing item in your AA application form?

Ans. Here are the steps to input wastage claim details in the AA application form.

  • Open your AA application and click the additional input tab.
  • Go to the wastage claim section and tap on select input item. Tick & add items from the grid.
  • Then, to the edit icon. Herein, in the wastage claim grid, input justification & wastage claim percentage.
  • Tap on ‘Update’.

Q.7. How much is the validity period for the import of AA?

Ans. 12 months from the issue date of authorization is the Validity period for the import of AA.

Q.8. What does the AA application form charge?

Ans. If you want a certificate, license, permission, advance authorization, DFIA, or EPCG authorization for the restricted item, you have to give the application charge of one per thousand. That may be Rs. 500 minimum and Rs. 100000 maximum depending on the CIF value or duty of authorization.

Q.9. Where to see your CBIC transmission details for AA?

Ans. You can avail of your CBIC transmission details for AA by following the given steps.

  • Enter your registered AA file number.
  • Navigate to My Dashboard and tap on Submitted Applications.
  • Click on Type of Scheme, and Select AA from the drop box.
  • Go to the Type of application column and select issuance of AA.
  • The action section is where you go next, and click on transmission details.

Q.10. How to cancel AA Authorization?

Ans. You can surrender your issued AA authorization. All you have to do is file a Closure of AA application.

Q1. How to apply for AA invalidation?

Ans. When you want to apply for AA, follow these steps!

  • Go to the services column after signing in with your file number and go to the AA section.
  • Tap on the invalidation of advance authorization option.
  • Start applying or select the existing draft.
  • For applying fresh, you have to click the authorization for invalidation button and fill out the form.
  • Now, you have to pay the application fees and submit the application.

Q2. How to add invalidation/indigenously procured item/supplier details in the AA invalidation application form?

Ans. Follow the given steps to add invalidation details to your AA invalidation form.

  • Click open your application form and hit the additional input button.
  • Go to the invalidation details section and tap the select input item tab.
  • Tick the item you want to add from the drop box and click on the edit icon for the added items.
  • Enter the quantity you want to invalidate and press save.

And,

Follow the next steps to add supplier or indigenously procured item details.

  • Tap the indigenous supplier details option or the SEZ supplier details.
  • Tick the serial number of the input item from the drop box.
  • Insert the quantity that you want to procure from the respective supplier.
  • Hit the Add button and start adding up the details like IEC number, branch code, etc.
  • Once done, click on add to save.

Q3. How much does applying for invalidation of advance authorization cost?

Ans. You can amend or correct your issued authorization and apply for invalidation at Rs. 200 only.

Q1. How to apply for AA revalidation?

Ans. Here lay the steps to follow when applying for AA revalidation.

  • Navigate to the Services Column and tap on Advance Authorization.
  • Click on the Revalidation of Advance Authorization tab.
  • Start applying or select the draft application already existing.
  • If you are applying fresh, select the option authorization for revalidation.
  • Fill out your application, make payments, and tap on submit button.

Q2. How much does the first revalidation for AA cost?

Ans. First revalidation application form for AA costs Rs. 500.

Q3. How much does the second revalidation for AA cost?

Ans. The second revalidation application form for AA costs Rs. 1000.

EO-Extension of Advance Authorisation

Q4. How to apply for EO-extension of AA?

Ans. Follow the given steps to apply for EO-extension of AA.

  • Go to the services, then to Advance Authorization, and select EO-extension of advance authorization.
  • Start applying or select from the draft. If you opt for a fresh application, tap authorization for EO- extension.
  • Fill out the form, make payments, and submit it.

Q1. How to apply for AA revalidation?

Ans. Follow the given steps to apply for AA revalidation.

  • Navigate to the Services menu, to advance authorization, and then to the amendment of advance authorization.
  • Either select the application form draft or start fresh.
  • For a fresh application, tap on Authorization for Amendment.
  • You can now fill out the form, pay for it, and submit it.

Q.1. How to close your AA file?

Ans. If you want to close your AA file, follow the path given below.

  • Go to Services Menu, to Advance Authorization and next, to Closure of Advance Authorization from the drop boxes.
  • Start a new application or select from the draft.
  • If filing a fresh application, select authorization for closure.
  • Complete the form, pay the fee, and submit.

Q2. How to apply for Clubbing & Closure of AA?

Ans. If you want to apply for clubbing & closure of AA, follow these steps.

  • Visit the Services Column, navigate to Advance Authorization and then to Clubbing & Closure of AA tab.
  • Select whether to start a new application or choose from the draft.
  • Do not forget to select two or more authorizations to be clubbed for closing when filing fresh.
  • Fill up the form, pay the charges, and submit it to process.

Q3. How to surrender AA registration?

Ans. You have to make an application for closure of advance authorization if you want to surrender your AA registration. But if no exports & imports are made, you have to go to the redemption matrix and see the details in the Surrender section. Finally, verify the application and submit it to RA for approval.

Apply for Advance Authorisation

Apply for EO Extension

Amendment of Advance Authorisation

Invalidation / Certificate of Supplies

Revalidation of Advance Authorisation

Closure of Advance Authorisation

Clubbing and Closure of Advance Authorisations

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