The Advance License Scheme was established by the government of India as a part of the Foreign Trade Policy to offer inputs and duty-free materials that are required to manufacture the export products. The government has previously launched various schemes to uplift the value of exports.
With the help of the Advance License Scheme, you can import inputs at zero customs duty. The prime objective of this scheme was to increase the demand for Indian goods all over the world. The government wanted to bring down the cost of the final export product. The trade of export and import of a country is considered profitable only if the value of exports is more than that of the imports.
What is the process for the closure of the Advance License?
The process to close down the Advance License is not a piece of cake. The exporter has to get approval from both the authorities the DGFT and the customs department. Before initiating the process of closing the Advance License the exporter must keep all the documents ready in hand as the authorities can ask for the documents to cross-check and verify the process of export obligation. Try to go through all the rules and regulations beforehand for a smooth start and finish.
If the exporter completes the imports and fulfils the export obligation, then the exporter must submit all the relevant documents to the Directorate General of Foreign Trade (DGFT). All these documents will be a testimony to the fact that the process of export obligation has been completed by fair means.
First and foremost, the exporter must present the Application form ANF 4F before the regional licensing authority of DGFT. Each document should be self-attested by the applicant which means there should be a signature of the license holder on every document of the file.
The ANF 4F form must include all the information about the authorization and the applicant such as Authorization Number, Cost, Insurance and Freight (CIF) value of the license, date of issuance, norms details and export obligation. Make sure to fill in all the details in the application form correctly and double-check it before submitting it to the licensing authority.
The export details must consist of the number of the Shipping Bills, Free on Board (FOB) value and quantity of export precisely in the application form. You will also find other details about the import items like CIF value of import, Bill of Entry details, quantity, etc. If the authorities find the application of the exporter complete, then they issue the exporter with the Export Obligation Discharge Certificate. This letter is also known as the redemption letter. What is the procedure of bond cancellation and Bank Guarantee at the customs department?
One cannot get bond cancellation from the customs department until and unless he/she receives the letter of closure from DGFT RA. For getting closure, the applicant must carry the documents such as an original copy of the redemption letter, copies of other documents that were presented to DGFT RA, and a Copy of the Bond. If the authorities feel content with your file, then you will be handed over a letter regarding the Bond cancellation and Bank Guarantee.