Recently, the directorate general of foreign trade (DGFT) simplifies the composition fee for export obligation extension under the advance authorisation scheme.
About Advance Authorisation Scheme
- An advance authorisation scheme allows duty-free import of inputs, which have to be mandatorily used in products that are required to be exported within a specified time.
- They are not allowed to sell the products in the domestic market.
- Advance Authorization is valid for 12 months from the date of issue of such Authorization.
- The revised composition fee formula is based on a specific rate for different levels of the 'CIF (cost, insurance, freight) value of authorisation.
- The fees levied under these 3 slabs; at ₹5,000 for a cost, insurance, freight (CIF) value of advance authorization license valued at up to ₹2 crores, ₹10,000 for a value between ₹2 crore and 10 crores, and ₹15,000 for value over ₹10 crores.
- The simplification of calculations for composition fees helps in automation and faster service delivery by making the process more efficient and easier to understand.
Q1) What is the directorate general of foreign trade (DGFT)?
It is an attached office of the Ministry of Commerce and Industry and is headed by the Director General of Foreign Trade. This organization has been essentially involved in the regulation and promotion of foreign trade through regulation.
Source: DGFT simplifies composition fees for export obligation extension under the advance authorisation scheme