All the three categories namely Physical Exports, Deemed Exports & Intermediate Supplies are classified under common platform known as “ADVANCE AUTHORISATION SCHEME” under the popular Duty Exemption Scheme (DES).

Under DES Scheme, the advance authorizations are issued for duty free imports required for export production.
a) Advance Authorization are issued to manufacturers exporters or merchant exporters tied to manufacturer(s) for duty-free imports of inputs.
b) Supply of Goods to ultimate exporter holding another Advance Authorisation / Duty Free Import Authorisation.
c) Supply of Goods to the various categories as mentioned in Chapter 7.02 of the Policy (8 notified categories).
d) Supply of stores on board of the foreign going vessels / aircrafts.
e) Supply to SEZ such as EOU / Project Authority / Deemed Export
f) Supply against E.P.C.G License.

. The following duties are exempted by using AA –
• Basic Customs Duty.
• Additional Customs Duty including Education Cess. (Not for DFIA)
• Anti-Dumping Duty / Safeguard Duty / Transition Product Specific Safeguard Duty (these are however payable on deemed exports under para 7.02 (c), (d) & (g).

Important Points-

 Advance Authorization or materials imported are not transferable even after completion of export obligation. In case Bank Guarantee / LUT has been redeemed, the Licensee can get the duty free inputs processed from any manufacturer under Actual User Condition i.e. for domestic sale.

• Goods already imported / shipped / arrived in advance but not cleared from Customs are also allowed for clearance against Advance Authorization issued subsequently.

• The authorization holder can procure the inputs from Indigenous sources / EOU etc. against Invalidation Certificate / ARO to be issued by the Regional Authorities in terms of para 4.14 of Handbook Redemption / No Bond Certificate.

Export Obligation Discharge Certificate (EODC) –

1. In case Authorization holder imports inputs first and exports later, the Authorization holder shall submit online application in ANF-4F. In such cases, if EO has been fulfilled, the Regional Authority may issue EODC / Redemption Certificate to Authorization holder and forward a copy to the Customs authority at the port of registration of Authorization indicating the same details of proof of fulfilment of EO as stated in paragraph (a) above evidencing fulfilment of Export Obligation.
2. Copy of EODC will also be endorsed by Regional Authority to Customs at the Port of Registration by post till system of transmitting these through EDI under message exchange between DGFT and CBEC is introduced.

Advance Authorizations, commonly known as ‘Advance License’, in the market are available for importing input material duty free for most items except those that are restricted by the policy. You can save a lot of money by availing this benefit as a manufacturer/ trader. To know more about how this can be issued for your business, please contact Minu International.