Advance licence

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 November 2013 Dear Sir,

I need deatil information for advance licence . we want to import raw material for transmission/ Gear box. Can i use advance licence scheme for import if i am planning to export final product using imported raw material.

CS M Pota

CS M Pota (Expert)
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09 December 2013 Advance licence is called as Advance Authorisation(AA).Under the AA Scheme of Foreign Trade Policy 2009-14(FTP)

1) AA is issued by the Regional DGFT office on application made to it.

2) AA holder of AA is allowed to import Raw material,Paking material as per the Satndard Input Output Norms (SION) fixed by under FTP for manufacturing the Final Product.If SION is not fixed the same should be fixed by the DGFT office New Delhi

3) AA holder is required to manufacture the final products from the imported material under AA and Fulfil the Export Obligation(EO) by exporting the Fixed quantity of the final product and earning the foreign currncy as per the AA with minimum value addition as per applicable provision of FTP within the stipulated period as mentioned in AA which may be extendable as per the provision of the FTP.

4)If AA holder does not fulfil the EO in quantity of the Final product the Customs duty saved at the time of import will have to be repaid with interest at the applicable rate to the Customs authority of the port of Import.If the AA holder fulfilles the EO in part in the quantity the duty saved will have to be paid in prorata basis.

5) If the EO is fulfilled in quantity but there is shortfall in
value, no penalty shall be imposed if Authorisation
holder has achieved minimum VA prescribed. However,
if VA fails below the minimum VA prescribed,
Authorisation holder shall be required to deposit an
amount equal to 1% of shortfall in FOB value in Indian
Rupee

6) Value wise shortfall shall be calculated with reference to
actual quantity of exports and FOB value of realisation
with reference to prorata quantity of imports and CIF
value. For example, if export performance is only 50%
quantitywise but import has been for complete CIF value
permitted, then VA would be calculated on a prorata
basis, i.e. with reference to 50% of CIF value of imports.
This would accordingly imply that where Authorisation
holder is unable to export, no penalty on valuewise
shortfall shall be imposed.

7) AA holder is required to maintain requisite records of the imported rawmateri al as per the FTP

8) AA is required to be registerd at the port of registration as declared at the time of application for AA.

You may use AA if SION for your final product is fixed else you are required to get it fixed from the DGFT office New Delhi