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Duty Exemption / Remission Schemes


Frequently Asked Question (FAQ)
Duty Exemption / Remission Schemes

Question: What is Advance Authorization?
Advance authorization is for duty free import of inputs which are actually incorporated in export product. It is issued for inputs in relation to resultant product.
Question: Who are eligible for Advance Authorization?
Manufacturer exporter or Merchant exporter tied to supporting manufacturer can obtain Advance authorization.
Question: What is the condition for availing Advance Authorization?
  1. Minimum value addition to be achieved is 15%
  2. Actual user condition- neither the authorization nor the material would be transferrable even after completion of EO
Question: Whether domestic sourcing of inputs is allowed? If so, the benefit, if any.
Yes, inputs can be procured indigenously in lieu of direct import. Such supplies which are as deemed exports, would be exempted from GST.
Question: What is the validity for AA?
12 months from the date of issue.
Question: What is the time period for completing EO?
It is 18 months from the date of issue of authorization. It can be extended for 6 months from the date of expiry of EO period on payment of composition fee of 0.5% of the short fall. Further, extension of 6 months after first extension may also be granted on payment of composition fee at 0.5% per month on unfulfilled value of the EO provided minimum 50% EO in quantity and value has been fulfilled.
Question: Whether import under AA is exempted under IGST?
Yes, there is exemption from IGST under AA till 31.03.2020.
Question: Whether Anti-dumping Duty & Safeguard Duty are exempted on import under AA?
Yes, both the duties are exempted.
Question: What is DFIA?

Duty Free Import Authorization (DFIA) is an authorization issued to allow duty free import of inputs. Basic Customs Duty is exempted under DFIA.

Question: What is the eligibility for obtaining DFIA?

It will be issued on post export basis for SION products only. Manufacturer as well as Merchant exporter tied with supporting manufacturer is eligible for the Scheme. Minimum value addition of 20% is required.

Question: What is the procedure for obtaining the DFIA?

An application in ANF 4G is to be filed with concerned Regional Authority before effecting exports under DFIA.

Question: What is the validity period for DFIA?

Validity of DFIA is 12 months from the date of issue.

Question: Whether there is any scheme for Gems & Jewellery sector?

Exporters of Gems & Jewellery sector can import/ procure duty free inputs for manufacturing of export products.

Question: What are the schemes for Gems & Jewellery sector?

The Schemes for Gems & Jewellery sector are as follows:

  1. Advance Procurement/ Replenishment of Precious metals from Nominated Agencies;
  2. Replenishment Authorization for Gems;
  3. Replenishment Authorization for Consumables
  4. Advance Authorization for precious metals
Question: What are the value addition norms for Gems & Jewellery sector?

The value addition is required as under:-

  1. Plain gold/platinum/silver jewellery and articles & ornaments -3.5%.
  2. All types of studded gold/platinum/silver jewellery and articles-6% for studded with colored gem stones and 7% for studded with diamonds.
  3. Any jewellery/articles manufactured by fully merchandised process 2%.
Question: Whether DFIA Scheme is available for Gems & Jewellery sector?

No, DFIA Scheme is not available.

Question: From where the exporter can obtain Gold/Silver/Platinum?

The same may be obtained from nominated agencies which are MMTC Ltd, The Handicraft and Handlooms Exports Corporation of India Ltd, The State Trading Corporation of India Ltd, PEC Ltd, STCL Ltd, MSTC Ltd, and Diamond India Limited.

Question: Whether personal Carriage of export Parcels is allowed?

Yes, the articles as samples up to US$ 1 Million for Export Promotion Tours, sale abroad etc. are allowed with approval of Gems & Jewellery Export Promotion Council subject to the provision that promotes will bring back jewellery/goods or repatriate sale proceeds within 45 days from date of departure through normal Banking Channel.

Question: Can samples of Gems & Jewellery be imported duty free?

Yes, duty free samples upto Rs. 3 lakhs or 0.25% of the average of last 3 years export turnover of gem & jewellery items, whichever is less is allowed in a financial year.


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