The Export incentives under Ministry of Commerce could be divided into two broad categories :

Duty Exemption:
  •  (a) Advance Authorisation Scheme
  • (b) Duty Free Import Authorisation Scheme (DFIA).s

Duty Remission Schemes:
  •  (a) DEPB
  • (b) DrawBacks


(Previously known as Licence now changed to Authorization )

An Advance Authorisation (AA) is issued to allow duty free import of inputs, which are physically incorporated in the export product (making normal allowance for wastage). In addition, fuel, oil, energy, catalysts etc. which are consumed/utilised in the course of their use to obtain the export product is also allowed. Duty free import of mandatory spares upto 10% of the CIF value of the (AA) which are required to be exported/supplied with the resultant product may also be allowed under Advance Authorisation. Advance Authorisations are issued on the basis of the inputs and export items given under SION. However, they can also be issued on the basis of Adhoc norms or self declared norms as per para 4.7 of Handbook of Procedures (Vol. I).

Advance authorization could be broadly categorized into two:
  1. i )Advance authorizations were SION exist
  2. ii) Advance authorizations under para 4.7 of HBP 2004-2009 (adhoc)

Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s): i) For Physical exports (including exports to SEZ); and/ or ii) For Intermediate supplies; and /or iii) For Deemed Exports. iv) For Supplies of stores on board of the foreign going vessel/aircraft subject to the condition that there is specific SION in respect of the item(s) supplied for import of inputs required in the manufacture of goods. NOTE: *Advance Authorisation is subject to Actual User Condition. i.e. it cannot be transferred or sold. *Advance Authorisation and/or materials imported thereunder shall not be transferable even after completion of export obligation. *However, the Authorisation holder will have the option to dispose off the product manufactured out of the duty free inputs once the export obligation is completed.

Advance Authorisations are exempted from payment of following Duties:
  1. (a)Basic Customs Duty,
  2. (b)Additional Customs duty, Education Cess,
  3. (c)Anti dumping duty
  4. (d)Safeguard duty, if any.

Export Obligation The period for fulfilment of the export obligation under Advance Authorisation shall be as 36 months.
Import Validity : The validity for Imports is 24 Months.
Value Addition: Minimum Value Addition is 15%.

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