Advance authorisation licence for brass components

Refer to Para 4.20 of Foreign Trade Policy 2015-2020

"(i) Holder of an Advance Authorisation / Duty Free Import Authorisation can procure inputs from indigenous supplier/ State Trading Enterprise in lieu of direct import. Such procurement can be against Advance Release Order (ARO), Invalidation Letter, Back-to-Back Inland Letter of Credit."

Para  4.20 (ii) of Ftp 2015-2020

When domestic supplier intends to obtain duty free material for inputs through Advance Authorisation for supplying resultant product to another Advance Authorisation / DFIA / EPCG Authorisation, Regional Authority shall issue Invalidation Letter.

(iii) Regional Authority shall issue Advance Release Order if the domestic supplier intends to seek refund of duty through Deemed Exports mechanism as per provisions under Chapter-7 of FTP.

Please also see the Para 4.20 of FTP 2015-2020

(v) Advance Authorisation holder under DTA can procure inputs from EOU / EHTP / BTP / STP / SEZ units without obtaining Advance Release Order or Invalidation Letter.

If you can fulfill the value addition as per sion norms, you can do so.. But to qualify for EO you ll have to show your Iec number in the shipping bill of your customer as third party. Else the obligation cannot be completed.. And Mr. Ramesh, please do not be diplomatic in your replies. You always copy paste some paragraphs which may or may not be relevant. FTP can be read by anyone. People here are with practical problems. Pls understand that..

If you can fulfill the value addition as per sion norms, you can do so.. But to qualify for EO you ll have to show your Iec number in the shipping bill of your customer as third party. Else the obligation cannot be completed.. And Mr. Ramesh, please do not be diplomatic in your replies. You always copy paste some paragraphs which may or may not be relevant. FTP can be read by anyone. People here are with practical problems. Pls understand that..

Thank you for your prompt input. But still my doubt remains unclear, Agreed that Export obligation should be fulfilled, please go through the following and give your feedback: - brass scrap imported against advance authorisation in my firm's name, - brass scrap converted into brass rods for my customer - we fulfil the sion norms and get necessary value addition - how to bill our final product (brass rods) to my client who is a manufacturer of brass components and is an exporter ? - how will the purchase of brass rods from our firm through AA licence benefit my client ? Awaiting you reply in simplified terms (jargon and law language is difficult to interpret)

It is not clear as to your client further doesany work on the material sold by you? If not, you could be considered as supporting manufacture and the procedure said above can be followed.

Mr Keyur,

kindly Note that if you  import the items which are  mentioned in ADVANCE LICENCE are admissible for fulfill EO ( export in SEZ only) items  exports which is indicate in Shipping bill  to SEZ unit only.

 

 

 

Dear Mr. Ajit,

Yes, my client does machining on the products that i sell to him.

I import brass scrap and make brass rods for him, these rods are cut and machined into different brass components and are then exported by my client.

Please advice on how do i bill him ?

Regards

There are different components involved in the procedure. If he is claiming duty drawback, he cannot declare your IEC in his shipping bill. He should forgoe the drawback claim on his exports. Accordingly such percentage of drawback,he may ask you to consider in pricing. Have a discussion with him as to whether he is ready for this transaction.