The Advance Authorization Scheme (AAS) is a significant export promotion measure under India's Foreign Trade Policy. It allows duty-free import of inputs that are physically incorporated in export products, helping reduce production costs and enhance the competitiveness of Indian goods in international markets. In this blog we know about tthe advance scheme application process Navigating the application process for this scheme can be complex, but with the right guidance, exporters can benefit greatly. This article provides a detailed guide to the Advance Authorization Scheme application process.
Introduction to the Advance Authorization Scheme
The Advance Authorization Scheme application process permits the duty-free import of raw materials, components, and intermediates necessary for the production of export goods. The authorization is issued by the Director General of Foreign Trade (DGFT) and is subject to specific conditions and norms.
Eligibility Criteria
Before applying, it is crucial to ensure that you meet the eligibility criteria for the scheme:
- Export Obligation: The applicant must fulfill the export obligation, which involves exporting finished products made from the imported inputs within a specified period.
- Physical Incorporation: The imported inputs must be physically incorporated in the export products.
- Standard Input-Output Norms (SION): The applicant must adhere to the SION, which specifies the quantity of inputs required for manufacturing a unit of the export product.
Step-by-Step Application Process
Preparation of Documents
The first step in the application process is preparing the necessary documents. These include:
- Import Export Code (IEC): A valid IEC issued by the DGFT.
- Digital Signature Certificate (DSC): A valid DSC for online application submission.
- Bank Certificate: A certificate from the applicant's bank confirming the exporter's financial credibility.
- Proforma Invoice: A proforma invoice detailing the inputs to be imported.
- Technical Details: Detailed technical specifications of the inputs and the finished products.
Filing the Application
The application for Advance Authorization Scheme must be filed online through the DGFT's e-portal. Here are the steps involved:
- Login to the DGFT Portal: Access the DGFT's online portal and log in using your credentials.
- Select Advance Authorization: Navigate to the "Advance Authorization" section and select the appropriate application form.
- Fill in the Details: Enter all the required details, including the description of the inputs, the export product, and the technical specifications.
- Upload Documents: Upload the necessary documents, such as the IEC, DSC, bank certificate, proforma invoice, and technical details.
- Review and Submit: Review the application for accuracy and completeness before submitting it online.
Application Fee Payment
Upon submission, an application fee must be paid. The fee can be paid online through the DGFT portal using various payment methods, including net banking, credit card, or debit card.
Application Processing
After submission, the application undergoes a scrutiny process by the DGFT. During this stage:
- Verification: The DGFT verifies the details provided in the application and the supporting documents.
- Clarifications: If needed, the DGFT may seek additional information or clarification from the applicant.
- Approval: Upon successful verification, the DGFT approves the application and issues the Advance Authorization.
Receiving the Authorization
The approved Advance Authorization is available for download from the DGFT portal. The authorization includes details such as:
- Authorization Number: A unique number assigned to the authorization.
- Validity Period: The period within which the inputs must be imported and the export obligation must be fulfilled.
- Conditions and Norms: Specific conditions and norms that the exporter must comply with.
Utilizing the Advance Authorization
Once the authorization is received, the importer can proceed with the duty-free import of inputs. The following steps outline the utilization process:
Import of Inputs
- Customs Clearance: Present the Advance Authorization at the customs for duty-free clearance of the imported inputs.
- Record Keeping: Maintain accurate records of the imported inputs, including details of quantities, invoices, and usage.
Manufacture and Export
- Production: Use the imported inputs to manufacture the export products as per the norms specified in the authorization.
- Export Documentation: Ensure proper documentation of the export transactions, including shipping bills, export invoices, and proof of export.
Fulfillment of Export Obligation
- Export Completion: Complete the export of the finished products within the validity period of the authorization.
- Submission of Proof: Submit proof of export to the DGFT, including shipping bills, Bank Realization Certificate (BRC), and other required documents.
Post-Export Compliance
After fulfilling the export obligation, the exporter must comply with the following requirements:
Redemption of Authorization
- Application for Redemption: Apply for the redemption of the Advance Authorization by submitting the required documents to the DGFT.
- Verification and Closure: The DGFT verifies the submitted documents and, upon satisfaction, closes the authorization.
Maintain Records
- Record Retention: Maintain records of the import and export transactions for a specified period, as mandated by the DGFT, for audit and verification purposes.
Conclusion
The Advance Authorization Scheme offers significant benefits to Indian exporters by allowing duty-free import of inputs, thereby reducing production costs and enhancing competitiveness. However, navigating the application process requires careful preparation, accurate documentation, and adherence to the specified norms. By following this detailed guide, exporters can effectively apply for and utilize the Advance Authorization, ensuring compliance and maximizing the benefits of the scheme.