A Duty-Free Import Authorization (DFIA) is a document that allows duty-free import of inputs required in the production of an export product, with normal allowances for wastage, energy, fuel, catalyst, and other factors. Many are employed in the process of obtaining the export product.
The Director-General of Foreign Trade (DGFT) has the authority to exclude any product(s) from the plan via public notice and public interest. Provisions of paragraphs 4.12, 4.18, 4.20, 4.21 and 4.24 of FTP is applicable to DFIA.
The authorization will be based on the input and export item norms outlined in the Standard Input and Output Norms (SION). As a result, the import entitlement must be restricted to the amount specified in SION.
Previously, duty-free import of mandatory spares up to 10% of the CIF value of the Authorization that must be exported/supplied as the end product may have been permitted under the plan. This type of authorization might be given to a merchant exporter or a manufacturer exporter who is connected to a supporting manufacturer.
The new Duty Free Import Authorisation (DFIA) Scheme is prescribed in Chapter 4 of FTP explains the details of Duty-Free Import Authorization and how it differs from the old Foreign Trade Policy (FTP) 2009-2014. Provisions of paragraphs4.26, 4.27, 4.28, 4.48, 4.49(e) & 4.49 (f) and 4.52 of this Handbook of Procedures shall also be applicable for DFIA Scheme. The following is a description of the new Duty-Free Import Authorization Scheme policy:
(i) For products for which Standard Input Output Norms have been notified, a Duty-Free Import Authorization will be provided after export.
(ii) Any Merchant Exporter must provide the name and address of the supporting manufacturer of the export product on the export document, such as the Shipping Bill / Bill of Export / Tax invoice for export prescribed under the GST rules.
(iii) Before exporting under a Duty-Free Import Authorization, an application must be lodged with the relevant Regional Authority.
To be successful, minimum value addition of 20% must be met. If greater value addition is required for Advance Authorisation in Appendix 4C, the same value addition is required for Duty-Free Import Authorisation as well.
The processes to follow under the duty-free import permission scheme are as follows:
Step 1: The applicant must determine whether or not the exported item is eligible for DFIA in SION.
Step 2: If the export item meets SION requirements, the applicant must submit an online application through the DGFT site and obtain a File number.
Step 3: Export must be completed within 12 months of the file number being issued.
Step 4: On all export documents, such as shipping bills, tax invoices, and bills of export, the applicant must include the generated file number.
Step 5: Once the export obligation has been fulfilled, the applicant must apply for a transferable DFIA licence.
Step 6: The applicant must submit necessary papers to the pertinent DGFT RA, such as a shipping bill, an E-BRC, a tax invoice, and so on.
Step 7: The DGFT RA will review the provided documentation and, if they are clear, will issue the transferable DFIA licence within 20-25 days.
Step 8: Once the DFIA licence has been given by the DGFT RA, the DFIA licence must be registered in customs for verification purposes.
Step 9: The applicant can either import or sell the DFIA licence on the market.
We are a group of DGFT experts who can assess the DFIA scheme's viability for exports.
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In the Foreign Trade Policy, Duty exemption schemes were introduced to give way to the dutyfree import of raw materials or inputs required for the manufacturing of export products, which made life easier for the exporters. Our dedicated team of Directorate General of Foreign Trade experts analyze the feasibility of the DFIA scheme for exports. Assisting in the documentation, preparing the application and making the online application followed by submitting the hardcopy in DGFT, we do it all. We tend to coordinate with DGFT and other departments for the transferable DFIA licence and redemption of the same.
Apply for DFIA File Number
Apply for Transferable DFIA Scrip
Invalidation / ARO