Clubbing of Advance Licenses

Introduction

By the term clubbing, you must have received an idea of what are we going to talk about today. Ladies and gentlemen we are going to spill the beans on the process of clubbing of the Advance Licenses.
According to the data of the Directorate Foreign of General Trade (DGFT) Policy, clubbing of the advance authorisations which are issued on or before 31.03.2009 shall not be allowed.
In other words, adjustment of excess exports and imports from one licence to an another licence to meet the overall EO against all the clubbed Advance licences.

Let’s go through the process of clubbing of Advance License

• First and foremost you will have to request the authorities for clubbing by submitting an application to them. It must be done in ANF – 4C to the concerned Regional Authority (RA) who has given the nod to the authorisations.
• Not everyone can avail to the benefit of clubbing of Advance authorisations. The facility of clubbing of Advance authorisations will be only made available for the purpose of either redemption or regularisation of such authorisations. The regional authorities will further restrict any kind of export or import against clubbed Advance authorisations.
• Apart from that, the great facility of clubbing will also be present for Advance authorisations for annual requirements that have been issued in the course of Foreign Trade Policy period 2009-14, 2015-20. Verify and make sure that the imports and exports that have come to pass are notified as per Standard Input Output Norms (SION).
• The authorisations under which the similar duty exemption has been put will only be permitted to be clubbed together. These types of authorisations can be related to different financial years.
• As a matter of fact, only those authorisations will be clubbed that have been granted within the span of 18 months and that too starting from the date of issue of earliest authorisation that is needed to be clubbed even if those authorisations are valid or invalid.
• When we go further, the main basis for clubbing is that the imports must be made during a period of 30 months from the date of earliest authorisation then only they will be taken into consideration. And if in any case the imports are made after a span of 30 months, then they shall be regularized as per Para 4.49 of the Handbook of Procedures (HBP).
• The exports that are made within the initial time of the export obligation period or in the extended export obligation period of individual organizations as in after payment of composition fee as per provisions of Para 4.42 of HBP will be clubbed.
• After the clubbing, if by any case there is a shortfall in quantity or value, then it will be governed as per the provisions of Para 4.49 of HBP 2015- 2020. The clubbing of authorisations provided with different export obligation periods is also permitted.
• Only the inputs that are common in all authorisations can be clubbed. The duty-free inputs can be looked after and regulated according to SION/Ad-Hoc Norms fixed by NC. Basically, it is not necessary for all the inputs in all authorisations to be the same.
• You can check the Foreign Trade Policy (FTP) to figure out the minimum value addition and the procedures to maintain the export product on clubbing.
• After clubbing, the authorisations will be available to be deemed for all purposes to one authorisation. The criteria for calculating the value addition will be based on total Cost Insurance and Freight (CIF) and total Freight on board (FOB) that came after the clubbing of authorisations. There is no scope for the cases clubbed as per the previous provisions to be reopened.
• If an Advance License Holder tries to take the help of any fraudulent practices in the process, then he/she will not be granted the facility of clubbing by the regional authority. Then no clubbing of authorisations will take place. In the case, where an EODC/redemption letter has already been presented or adjudication orders have already been passed by the customs authority, it will not be allowed.
• The additional provisions for clubbing of authorisations have been stated under Appendix 30A which is issued under FTP 2009-14 / Appendix-4J (issued under FTP 2015-20) and the authorisations that have been issued with an export obligation period less than 18 months: –
• The export obligation period of clubbed authorisations can be estimated from the date of first import in any authorisations presented to be clubbed. The clubbing of this type of authorisations will be permitted in all exports that are fulfilled within the initial or extended export obligation period determined from the date of first import in any proposed authorisations to be clubbed.

 Conclusion of Clubbing of Advance Licenses

Be fair and honest throughout the process of Clubbing of Advance Licenses. You can also take the help of top Advance License consultants to get an easier way out. In today’s time, you will simply be able to find Advance authorisation consultants to help you out.

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Authors Bio:-

Sudheer Varma Vegesna