Advance Authorisation Scheme

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Overview:

Recently, the Directorate General of Foreign Trade (DGFT) implemented the Advance Authorisation Scheme under the Foreign Trade Policy, which allows duty-free import of inputs for export purposes.

About Advance Authorisation Scheme

 

  • It allows duty free import of inputs, which are physically incorporated in an export product.
  • In addition to any inputs, packaging material, fuel, oil, catalyst which is consumed / utilized in the process of production of export product, is also be allowed.
  • They are not allowed to sell the products in the domestic market.
  • The Advance Authorization is valid for 12 months from the date of issue of such Authorization.

 

Eligibility for Advance Authorisation Scheme

  • This scheme is available to either a manufacturer exporter directly or a merchant exporter tied with a supporting manufacturer.
  • It includes physical exports, intermediate supply, supplies made to specified categories of deemed exports.
  • Duties exempt: 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.

 


Q1) What is Anti-dumping duty?

Anti-dumping duty refers to a tariff or additional import duty imposed by a country on specific goods that are being dumped into its domestic market. Dumping occurs when a foreign company sells its products in another country at prices lower than their normal value or lower than the production cost.

Source: DGFT implements the Advance Authorisation Scheme, allows duty-free import of inputs for export purposes