Advance Authorisation(AA)

Description
Advance Authorisation Scheme : Advance Authorisation is issued to allow duty free import of input, which is physically incorporated in export product making normal allowance for wastage . In addition, fuel, oil, catalyst which is consumed / utilized in the process of production of export product, may also be allowed. Authorisation shall be issued in accordance with the Policy and Procedures in force on the date of issue of the Authorisation. Advance Authorisation is issued for inputs in relation to resultant product, on the following basis: 1. As per Standard Input Output Norms SION notified available in Hand Book of Procedures ; OR 1. On the basis of self declaration as per paragraph 4.07 of Handbook of Procedures. OR 1. Applicant-specific prior fixation of norm by Norms Committee as per para 4.06 of Handbook of procedures. OR 1. On the basis of Self Ratification Scheme in terms of para 4.06 of foreign trade policy. The quantity of inputs allowed for a given product is based on specific norms defined for that export product, which considers the wastage generated in the manufacturing process. DGFT provides a sector-wise list of Standard Input-Output Norms SION under which the exporters may choose to apply. Alternatively, exporters may apply for their own ad-hoc norms in cases where the SION does not suit the exporter. Advance Authorisation covers manufacturer exporters or merchant exporters tied to supporting manufacturer s .The inputs imported are exempt from duties like Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping duty, Safeguard Duty and Transition Product-Specific Safeguard duty, Integrated tax, and Compensation Cess, wherever applicable, subject to certain conditions. Duty-free importable items under the scheme The following items can be imported without payment of duty under this scheme: - Inputs that are physically incorporated in the product to be exported after making normal allowance for wastage - Fuel, oil, catalysts which are consumed or utilized to obtain the export product. Advance Authorisation for Spices: Duty free import of spices covered under Chapter-9 of ITC HS shall be permitted only for activities like crushing / grinding / sterilization / manufacture of oils or oleoresins. Authorisation shall not be available for simply cleaning, grading, re-packing, etc.

Benefits
• Input for exports exempted from payment of Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping Duty, Safeguard Duty and Transition Product Specific Safeguard Duty, wherever applicable.
• Exempted from IGST and Compensation cess.

Eligibility Criteria
1. Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer,.
2. Advance Authorisation for pharmaceutical products manufactured through Non-Infringing (NI) process (as indicated in paragraph 4.18 of Handbook of Procedures) shall be issued to manufacturer exporter only.
3. <br>
4. Advance Authorisation shall be issued for:
5. Physical export (including export to SEZ)
6. Intermediate supply; and/or
7. Supply of goods to the categories mentioned in paragraph 7.02 (b), (c), (d), (e), (f) and (g) of this FTP.
8. Supply of ‘stores’ on board of foreign going vessel / aircraft, subject to condition that there is specific Standard Input Output Norms in respect of item supplied
9. **Export Obligation:**
10. Minimum value addition of 15%
11. Period for fulfilment of export obligation - 18 months from the date of issue of Authorisation or as notified by DGFT.

Required Documents
• IEC Copy.
• Export Item Description.
• ITC HS code of the export product.
• Quantity of Export item.
• FOB value of item to be exported.
• Import Item description.
• ITC HS code of the import product.
• Quantity of Import item.
• CIF value of imported item.
• IGST duty percentage on item to be imported (%).
• Custom duty percentage on item to be imported (%).
• Port of Registration to be mentioned.
• Valid RCMC from an Export Promotion Council suitable to the export product.
• Industrial license.
• CA certificate.
• CA certificate of consumption for last 3 years.

Frequently Asked Questions
Q: Who can apply for the Advance Authorisation Scheme?
A: Manufacturer exporters or merchant exporters tied to supporting manufacturers are eligible to apply under this scheme.

Q: Can I apply for Advance Authorisation if I am a pharmaceutical exporter?
A: Yes, but Advance Authorisation for pharmaceutical products made through Non-Infringing (NI) process is issued only to manufacturer exporters.

Q: What benefits does this scheme offer for imported inputs?
A: It allows duty-free import of inputs physically incorporated in the export product, including fuel, oil, and catalysts consumed during production.

Q: Are there any exemptions from taxes and duties under this scheme?
A: Yes, inputs are exempted from Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping Duty, Safeguard Duty, IGST, and Compensation Cess.

Q: Is there any provision for importing spices under this scheme?
A: Yes, duty-free import of spices under Chapter 9 is allowed only for crushing, grinding, sterilization, or oil/oleoresin manufacturing, not for cleaning or repacking.

Q: What is the time limit to complete the export obligation?
A: Please follow the given path:
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The export obligation must be fulfilled within 18 months from the date of issue of the Authorisation or as notified by DGFT.

Q: What are SION norms?
A: SION (Standard Input Output Norms) are sector-wise norms notified by DGFT that define input-output ratios for specific export products.

Q: Is Advance Authorisation applicable for SEZ or intermediate supplies?
A: Yes, it can be issued for physical exports, including SEZ supplies, intermediate supplies, and other specified categories under FTP para 7.02.

Q: How do I start the application process for Advance Authorisation?
A: You must visit www.dgft.gov.in and apply under Services &gt; Advance Authorisation / DFIA &gt; Apply for Advance Authorisation (ANF 4A).

Q: What is RCMC and why is it necessary?
A: Please follow the given path:
RCMC (Registration cum Membership Certificate) from the relevant Export Promotion Council is required to claim export benefits and apply for restricted licenses.