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Duty Free Schemes of Advance Authorisation/ DFIA


Frequently Asked Question (FAQ)
Duty Free Schemes of Advance Authorisation/ DFIA

Question: We want to export prohibited goods .can we take advance authorization for import of inputs duty free?

You may avail advance authorization for import of inputs for manufacture of a product which is prohibited for exports. However such authorization will have to meet the following conditions, in addition to usual conditions:

(i) That the export is made subject to pre-import conditionwhich is manufactured in India using the material imported against the said authorisation; and

(ii) The facility under rule 18 (rebate of duty paid on materials used in manufacture) or sub-rule (2) of rule 19 of the Central Excise Rules, 2002  should be  availed.

Question: We have a value-wise shortfall in our exports under Advance Authorisation. Can we regularize it?

In case of any shortfall in value, authorization holder is required to deposit an amount equal to 1% shortfall in FOB value in Indian Rupee. The exchange rate applicable for determination of shortfall in Export Obligation shall be the exchange rate applicable on the date of issue of authorization.







 

 

Question: When the online redemption for Advance Authorisation is ly to be introduced and what is the cut -off date of shipping bill covered under it?

The online redemption for Advance Authorisation and Duty Free Import Authorisation (DFIA) will be introduced from 1st June,2014 . The online module will cover all shipping bill filed on or after 1.4.2009 from an EDI ports. The shipment prior to 1.4.2009 from an EDI Port and all shipment (without cut off date) from a non EDI port will continue to be on manual mode for discharge of exports obligation in respect of Advance Authorisation and DFIA.

Question: Whether labeling would be considered as an activity for the purpose of availing advance authorization scheme for supply to SEZ units?

 

Labeling does not involve a substantial manufacturing activity for which advance authorization is granted. Such operation does not qualify as “manufacturing” as defined in paragraph 9.36 of Foreign Trade Policy and hence no Advance Authorisation can be allowed to a DTA unit for supply to SEZ units.








 

 

Question: Can we avail amnesty scheme of Advance licence in respect of a licence in which adjudication proceeding has started ?

Public Notice No. 22 (RE-2013)/2009-2014 dated 12.08.13 is applicable to all pending cases of EO default.  Hence, even cases which are pending adjudication in appeal, can also be regularized under this Public Notice. The procedure for regularization of such cases would be as under:

(i) In respect of cases which are pending for adjudication will produce a copy of this closure letter from the concerned RA, to the Appellate Authority.

(ii) On submission of such closure letter Appellate Authority will decide on closure of such case/appealand will inform the same to the firm and to the concerned. 

Question: We have completed 65%& of EO under advance authorization and wants to avail benefits of PN 22 issued by DGFT. My total duty exemption for the authorization was Rs 2,30,00,000 when I cleared the goods on 18th July 2003. How much we have to pay under this PN 22?

Since you have completed 65% of EO, the default is for 35% of EO . The duty exemption availed on 35% would be 35/100 x 2,30,00,000 which equals Rs 82,25,000. Since PN 22 caps your liability of duty and interest to twice the amount of duty,you have to pay Rs 82,25,000x2 = Rs 1,64,50,000 to clear your liability.Pl see that the process is completed by 31st March,2014. 




 

 

Question: What is the import policy of gold import by the Premier and Star trading Hoses and also under advance authorization scheme?

Any authorisation such as Advance Authorisation (AA) / Duty Free Import Authorization (DFIA) is to be utilised for import of gold meant for export purposes only and no diversion for domestic use shall be permitted. For any AA / DFIA issued prior to 14th August 2013 the condition of sequencing the imports prior to exports shall not be insisted upon and Star Trading Houses (irrespective of whether they are nominated agencies or not) are permitted to import gold exclusively for the purpose of exports only. Similarly, exports towards fulfillment of obligation under AA/DFIA scheme shall not qualify as export for the purpose of the scheme of 20:80.







 

 

Question: How the Value Addition is clubbed for two advance authorisations with different value addition prescribed on them?

The value addition on clubbing should be the prescribed minimum value addition stated in the FTP and not the declared value addition given in the application. In case of clubbing of authorizations with different minimum prescribed value addition, the aggregate value addition should be the weighted average based on CIF value utilized in the respective authorisations. 

For example:

(i) CIF Value utilized under Authorisation A (issued under positive V.A provision): say, Rs. 1,00,000/-

(ii) CIF value utilized under Authorisation B (issued under 15% V.A provision):  say Rs. 2,00,000/-

(iii) Minimum FOB Value required under Authorisation A shall be: Rs. 1,00, 000/-

(iv) Minimum FOB value required under Authorisation B shall be:  Rs. 2,30,000/-(v)                Upon Clubbing, CIF value of the clubbed authorisation would be Rs. 3,00,000/- and the minimum FOB value of the clubbed authorisation would be Rs. 3,30,000/-






 

 

Question: We have a value wise shortfall in our exports under Advance Authorisation. How we can regularize it?

In case of any shortfall in value, authorization holder is required to deposit an amount equal to 1% shortfall in FOB value in Indian Rupee. The exchange rate applicable for determination of shortfall in Export Obligation shall be the exchange rate applicable on the date of issue of authorization.

Question: We have two export units and we have exported goods under post export DFIA. After transferability, we transferred the martial to any other unit for job work purpose. Now, Excise department is asking as to how we have given material for JOB work without intimation to Excise office or DGFT?

The permission of the Central Excise is required when the goods are subject to actual user as detailed in Paragraph 4.16 of the Handbook of Procedure (Vol.1). You have mentioned that you have already got the transferability endorsed on DFIA and thus permission of Excise should not be required as on transferred DFIA, you are not eligible for additional customs duty exemption and thus can not avail the CENVAT benefit which may be of concern to Excise authorities.

Question: Are we eligible for exemption from Anti Dumping duty on DFIA issued prior to 18th April 2013?

With effect from 17th September 2013, the exemption from safeguard duty and anti-dumping duty shall not be available in case materials are imported against Duty Free Import Authorisation (DFIA) issued prior to 18th April, 2013 that has been made transferable on or after the 18th April, 2013 by the Regional Authority.

 


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