DUTY EXEMPTION /REMISSION SCHEMES – enable duty free import of inputs for export production, including replenishment of inputs or duty remission.
Duty Exemption Schemes. – The Duty Exemption schemes consist of the following:
Advance Authorisation (AA) (which will include Advance Authorisation for Annual Requirement).
Duty Free Import Authorisation (DFIA).
Duty Remission Scheme. -Duty Drawback (DBK) Scheme, administered by Department of Revenue.
Scheme for Rebate on State and Central Taxes and Levies (RoSCTL), as notified by the Ministry of Textiles on 07.03.2019, and implemented by the DGFT.
Advance Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer.
Minimum value addition required to be achieved under Advance Authorisation is 15%.
Imports under Advance Authorisation are exempted from payment of Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping Duty, Countervailing Duty, Safeguard Duty, Transition Product Specific Safeguard Duty, wherever applicable. Import against supplies covered under paragraph 7.02 (c), (d) and (g) of FTP will not be exempted from payment of applicable Anti-dumping Duty, Countervailing Duty, Safeguard Duty and Transition Product Specific Safeguard Duty, if any. However, imports under Advance Authorisation for physical exports are also exempt from whole of the integrated tax and Compensation Cess leviable under sub-section (7) and sub-section (9) respectively, of section 3 of the Customs Tariff Act, 1975 (51 of 1975), as may be provided in the notification issued by Department of Revenue, and such imports shall be subject to pre-import condition. Imports against Advance Authorisations for physical exports are exempted from Integrated Tax and Compensation Cess upto 31.03.2020 only.
Validity period for import of Advance Authorisation shall be 12 months from the date of issue of Authorisation.
Period for fulfillment of export obligation under Advance Authorisation shall be 18 months from the date of issue of Authorisation. Period of EO fulfillment under an Advance Authorisation shall commence from date of issue of Authorisation, unless otherwise specified.
Extension in export obligation period for Authorisations issued under Appendix-4J (issued under FTP 2015-20) shall be allowed for a period not more than the half of the stipulated export obligation period. In such cases, composition fee shall belevied @ 0.5% per month of unfulfilled FOB value, in case exports effected are more than 50% within initial Export Obligation period and @ 1% per month where less than 50% exports have been effected within initial export obligation period.
Request for further extension of six months after first extension as in (b) above can be considered by Regional Authority, provided Authorisation holder has fulfilled minimum 50% export obligation in quantity as well as in value, on pro-rata basis. This will be subject to payment of composition fee @ 0.5% per month on unfulfilled FOB value of export obligation. No further extension shall be allowed by Regional Authority. This provision shall also be applicable to Advance Authorisations issued during FTP 2009-2014. However, only two extensions of six months each as mentioned above can be allowed subject to payment of composition fee and under no circumstance Regional Authority shall allow any extension beyond 12 months from date of expiry of EO period. At the time of filing application for second EO extension, the Authorisation holder will have to submit a self declaration to RA stating that unutilised imported/domestically procured inputs are available with the applicant.
Duty Free Import Authorisation is issued to allow duty free import of inputs. In addition, import of oil and catalyst which is consumed / utilised in the process of production of export product, may also be allowed.
Duty Free Import Authorisation shall be exempted only from payment of Basic Customs Duty (BCD).
Minimum value addition of 20% shall be required to be achieved.
Export shall be completed within 12 months from the date of online filing of application and generation of file number.
The record of shipping bills and other documents related to export is required to be maintained by the applicant for a period of 3 years from the date of issuance of scrip for post issue scrutiny and recovery purposes. Licensing Authority may call such documents in original at anytime within 3years.In case the applicant fails to submit the original documents on demand by Licensing Authority, the applicant shall be liable to refund the rebate granted along with interest at the rate prescribed under Section28AA of Customs Act 1962, from the date of issuance of scrip.