Advance Authorization
Manufacturer Exporters are allowed to import raw material & packing material without payment of custom duty (inclusive of other duties) and IGST to manufacture export products. The most important benefit is that you get exemption from custom duties i.e. Basic Customs Duty, additional custom duty, countervailing / safeguard duty /IGST/ social welfare charges.
An Advance Authorization under Duty Exemption Scheme can be obtained by manufacturer exporter or merchant exporter tied up with supporting manufacturer.
The exporter can apply to DGFT for Advance Authorization as follows:
1. Standard Input Output Norms (SION).
2. No Norms (Self-Declaration).
3. Net-to-Net basis.
Standard Input-Output Norms (SION) norms
In case of SION, applicant has to apply to DGFT as per ratio of raw material mentioned in SION which is fixed by DGFT and accordingly license will be issued considering the applied export quantity and import as per ratio already fixed for export quantity.
NO NORMS (Self-declared norms)
In case of No Norms, exporter himself gives the input ratio requirement for manufacture of export product and accordingly the exporter has to apply for license considering the export qty. and import as per ratio for applied export quantity.
Net to Net Basis Facility
The import of components/spare parts shall be permitted on Net to Net Basis, i.e., without any wastage, but with accountability clause and the type, technical specifications (including part No. if any), etc., of the components sought for import must have nexus or correlation to those utilized in the manufacture of the finished product, which should be reflected in export documents (Shipping Bills).
Compliances:-
Advance Import Authorization is with an Export Obligation Condition both in quantity & value terms.
The Advance Authorization issued and the materials imported thereunder will be with actual user condition. This means that the actual user cannot transfer the imported goods even after completion of export obligation.
Minimum Value addition of 15% or as specified must be achieved in value terms.
There are certain items with pre import condition.
