Duties Exempted under the Advance Authorisation Scheme.

Imports under Advance License are exempted from the payment of Basic Customs Duty (BCD), Additional Customs Duty, Education Cess, Anti-dumping Duty, Countervailing Duty, Safeguard Duty, Transition Product Specific Safeguard Duty, wherever applicable. Under the Advance Authorisation, imports for physical exports are also exempted from the whole of the integrated tax and Compensation Cess and such imports shall be subject to pre-import condition. Imports against Advance Authorisations Scheme for the physical exports are exempted from Integrated Tax and Compensation Cess up to 31.03.2020 only. As per Notification No. 57/2015-20 dated 31.03.2020, this exemption is renewed till 31.03.2021.

• Standard Input-Output Norms (SION)
• Ad-hoc norms fixed

1. Standard Input-Output Norms (SION) :

Standard Input-Output Norms (SION) is a list of standard norms that define the number of inputs required to manufacture a unit of output for export purposes. It contains a list of more than 10,000 products under different sectors. If manufacturer exporter and merchant-exporter want to modify existing SION then an application needs to be submitted to DGFT Head office.

2. Ad-hoc norms fixed

If there are no Standard norms for a particular export product, then the Exporter has to approach the Norms Committee at DGFT New Delhi and get the norms fixed for the export item either through Prior fixation of Norms or Fixation of Norms after getting the Advance License. All such Norms fixed under this category are known as "Ad-hoc Norms Fixed"

How Exporter can Search Norms?

To Search existing SION norms see the below procedure:

• Go to the DGFT website [https://www.dgft.gov.in/CP/]
• Go to Regulatory Updates
• Click on SION - here the exporter can see Chapter wise notes list
• Click on the Chapter notes and then the exporter can view the existing SION of that chapter notes.

Here you will see the list of Chapter wise notes

[SION Chapter List]

Also, the exporter can see the Application Master Data of SION, Ad-hoc Norms, No norms/Self Declaration Norms in the following way:

• Go to the DGFT website
• Go to Regulatory Updates,
• Click on Application Master Data
• Then click on Standard IO Norms or Ad-hoc norms or SION Chapter wise Notes
• Here the exporter can see the norms types, Export Product Group, ITS(HS Code) & its description

The below video is about the Fixation of Ad-hoc Norms under the Advance Authorisation scheme at DGFT Headquarters, New Delhi.

Many times, you have completed the Export obligation under the license and the license can be easily redeemed, but the norms have yet to be fixed by the Norms Committee, and as a result, you are unable to apply for Redemption. Because of this, it's important to know how norms are fixed and the various kinds of norms committees that exist. And what if your Norms case is denied? This video will cover all of these topics.

Norms Committee (NC) Role for Fixation of Norms

There are 7 Norms Committee (NC) as per Indian Trade Classification (Harmonized System) - ITC (HS) of export products (Annexure A).

For different commodities, we have different Norms Committee.

Following are the details of Norms Committees along with product groups dealt with by each Norms Committee and respective HS Chapters relating to norms fixation.

[Norms Committee]

Roles of Norms Committee:

• The applicant includes the project reports with the ad-hoc form application.
• The Norms Committee reviews the application of the ad-hoc norms and then with the help of various technical consultants, determines the wastage proportion that the exporter should be eligible for.
• Exporters, who do not agree with the decisions of the NC, can represent again to the concerned NC within 4 months from the date of the decision on ad-hoc norm fixation.
• The norms committee will make the effort to convert ad-hoc norms to Standard Input Output Norms (SION) within 6 months, and positively within 12 months from the date of ratification of ad-hoc norms.

Documents required for Fixation of Norms/Norms Fixation.

Following are the documents required for Norms Fixation under Advance License:

• DGFT DSC.
• Copy of IEC.
• Application form ANF - 4B.
• Copy Valid RCMC
• Copy of GST Certificate.
• Appendix - 4E - Chartered Engineer Certificate.
• Appendix 4K
• Application fees Receipt.
• Production & Consumption data of preceding 3 financial years.
• ADVANCE LICENCE copy if taken.
• Details of earlier licenses obtained (if any) for the resultant product during the preceding two licensing years.
• Copy of SSI/IEM/MSME.
• Detailed technical Notes on manufacturing process [Manufacturing flowchart] along with technical justification for wastage claimed at each stage of the process.

Fixation of Norms procedure - How does the Norms Fixation work?

We can get norms fixed in two ways:

1.Prior Fixation of Norms

2. Fixation of Norms after obtaining the Advance Authorisation.

Please find an image below which explains all the above two ways in a simple manner-

1. Prior Fixation of Norms:-

In the case where norms have not been notified and the applicant wants to get the ad-hoc norms fixed before making an application for Advance Authorization that is called Prior Fixation of Norms.

• The applicant submit the ANF 4B and the prescribed documents physically to the concerned NC in DGFT headquarters.
• The applicant can also submit the application online. In this case, the concerned NC will get selected automatically according to the products for fixation of SION/Ad-hoc norms.
• It is important to make sure the ANF 4B and prescribed documents are prepared error-free.
• After providing all the required data in the application, submit the application.
• The norms committee shall try to either fix these norms or provide ad-hoc norms on the basis of the application made.
• The decisions of the Norms Committees will be available on the DGFT website.
• Any ad-hoc norm fixed under this procedure shall be valid for one authorization for which such application is made and no-repeat authorizations shall be issued. However, Norms Committee can extend the validity period by two years from the date of fixation of such ad-hoc norms.
• The applicant will apply for Advance Authorization for fixed ad-hoc norms.
• The authorization shall be issued for import based on these ad-hoc norms.
• Then the applicant proceeds to complete the import & export obligation.

2. Fixation of Norms:

The prior fixation of norms consumes a lot of time & money. So DGFT decided under Para 4.07 of the HBP to process the Norms Fixation applications simultaneously with the Advance Authorization application.

• Advance License will be applied to the DGFT with the necessary above documents and at the same time, the copy of the application goes to the concerned Norms Committee.
• Such application needs certification by an Independent Chartered Engineer.
• The concerned norms committee will review the application, and approve and finalize it.
• The concerned norms committee prepares the Minutes & uploads them on the DGFT website.
• Meanwhile, the applicant can complete the import.
• Rest all the procedure remains the same like the exporter will complete the export obligations in the given period.

How can we assist you with Norms Fixation?

• We help you in preparing documents for the application of Norms Fixation at DGFT Headquarters.
• Coordination with Norms Committee and various technical officers/members for proper presentation of the case.
• Obtaining ad-hoc norms fixation.
• Obtaining Norms Fixation from Norms Committee.
• Guiding regarding the procedural requirement & Compliances to be followed by the Client after issuance of Norms Fixation.
• Obtaining Amendment and handling rejection of Norms.

Why Afleo Consultants?

There are many products already fixed but still many products have not been listed under S.I.O.N. so the exporters are unable to get duty-free import Advance Authorization entitlement.

We do all kinds of Norms Fixation, Ratification &Ad-hoc Norms from Delhi DGFT.

We will manage norms fixation in such a manner that the approval time for norms fixation will be very less.

We are the leading Import Export Consultant (DGFT & Customs Expert) having a client base across India. We provide all the services related to DGFT which include the MEIS scheme, EPCG, SEIS, Advance Authorisation, DFIA, RoSCTL scheme, TMA scheme, RoDTEP scheme, etc.

Our vast experience and immense knowledge have made us unmatchable in our field.

Important Terms & conditions under Advance Authorisation Scheme.

The benefit under Advance Authorisation scheme comes with certain terms and conditions, please find them below:

• Items prohibited for exports or imports are not allowed under AA.
• AA is issued Subject to Actual User Condition.
• Inter Unit Transfer of Inputs permitted.
• 15% is the minimum Value Addition to be achieved.
• Certain products have less/more Value Addition.
• Certain categories of Inputs are ineligible for benefits.
• Free of cost Material permitted for imports.
• Duty Drawback shall be available for only duty paid inputs used. (All Industry Rate of Drawback will not be available)
• Import of restricted items shall also be allowed under Advance Authorisation (AA) Scheme.

Actual User Condition under Advance Authorisation Scheme.

The material imported under Advance Authorisation shall be subject to the “Actual User” condition. It means that the material cannot be transferred and it has to be used in the premises of the License holder only. It is not transferrable even after the completion of Export Obligation (EO). However, the Advance License holder will have the option to dispose of/sell products manufactured out of duty-free input once the Export Obligation is completed.

Pre-Import Condition under Advance Authorisation Scheme.

It means that the raw material should be imported first; physically incorporated in the export product and then the export should take place. You cannot export first using the duty paid material that you have and then Import raw material duty-free. This is not allowed. Items that have the pre import condition have been indicated in Appendix 4J or SION Norms List.

Pre-Import Condition under Advance Authorisation Scheme.

It means that the raw material should be imported first; physically incorporated in the export product and then the export should take place. You cannot export first using the duty paid material that you have and then Import raw material duty-free. This is not allowed. Items that have the pre import condition have been indicated in Appendix 4J or SION Norms List.

Value-Addition under Advance Authorisation Scheme.

It means that the raw material should be imported first; physically incorporated in the export product and then the export should take place. You cannot export first using the duty paid material that you have and then Import raw material duty-free. This is not allowed. Items that have the pre import condition have been indicated in Appendix 4J or SION Norms List.

Minimum Value Addition under Duty Free import Authorisation scheme

A = FOB value of export realized or the FOR value of supply received.

B = CIF value of inputs covered by the authorisation, plus the value of any

other input used on which benefit of DBK is claimed or intended to be claimed.

Invalidation Letter under Advance License.

In case the exporter does not want to import directly under Advance Authorisation, i.e. he wants to procure raw materials indigenously from a domestic supplier. Then he/she needs to invalidate the Advance License for direct import and obtain the Invalidation letter from DGFT. Invalidation Letter is issued by DGFT RA at the time of Advance Authorisation or subsequently. The validity of the Invalidation letter is co-terminus with the validity of Advance Authorisation.

Redemption of Advance License / EODC.

On completion of the imports and exports, the license holder shall submit an application in ANF-4F for the Redemption of the Advance Authorisation License. The Regional Authority of DGFT will verify the completeness of the Application in all aspects. If Export Obligation (EO) and other conditions have been successfully fulfilled, the Regional Authority (RA) will issue the EODC (Export Obligation Discharge Certificate)/ Redemption Certificate to the Authorisation holder.

[ To know each and every detail about the EODC/Redemption of Advance Authorisation online on the newly launched DGFT portal watch the complete video given below- ]