advance license

Govt. has made some changes in the exim policy and now 'Advance licence" is called "Advance Authorisation"(I will refer it as AA in further text)

AA is issued to an exporter holding export order for duty free import of raw material required for item to be exported. It will be more clear from the following example.

Mr.John is exporter of product "A" and raw material he needs for manufacturing of product "A" is Product "B". He has received an order for export of 1000 Kgs of Prodcut "A" Now, to manufacture 1 Kg of Product 'A" he needs 2 Kgs of product "B". If Input-output norms for prodcut "A" are fixed as per above requirement, (One has to approach DGFT office for fixation of norms for any product - but norms for most of the products are fixed) Mr.John will have to apply to Office of Joint director General of Foreigh Trade of his jurisdiction for AA. He will have to attach copy of export order with the said prescribed application form i.e. relevant appendix of Aayat Niryat form. The office of Jt.DGFT will issue AA for duty free import of 2000 Kgs of Prodcut "B" So, that Mr.John can import the same without payment of any duty and manufacture 1000 Kgs of product "A" for export. Mr,John will have to export 1000 Kgs of product "A" and give proof of export to Jt.DGFT and get his file closed. However, Mr.John has option to first export product "A" manufactured out of rawmaterial i.e. Prodcut "B" purchased from domestic market and he can import raw material afterwards on replenishment basis.

Hope you above explanation suffice your requirement.