Govt set to relax rules under Advance Authorisation scheme for exporters

Exporters may no longer be denied duty-free import benefits under the Advance Authorisation (AA) scheme simply because their goods were shipped before the licence was issued, according to sources familiar with the matter.
The Advance Authorisation scheme allows exporters to import inputs—such as raw materials, components or chemicals—without paying customs duty, on the condition that these will be used to manufacture products for export. The scheme is a key tool to make Indian exports competitive by reducing input costs.
'Even if goods have already been shipped or have arrived in India, they can still be cleared under an Advance Authorisation granted later by DGFT—provided the importer files the Bill of Entry after the licence date. However, this relaxation won't apply to restricted goods or products that can only be imported through designated government agencies, unless DGFT gives special permission,' a senior government official said, requesting anonymity.
Until recently, as per sources, field formations of customs, particularly following objections raised by the Directorate of Revenue Intelligence (DRI) in Ludhiana, had taken a strict view that if the shipment left the foreign port before the date on which the AA licence was granted, the benefit of duty exemption should not be available—even if the goods were cleared through customs later.
However, after several industry bodies flagged concerns over unnecessary disputes and procedural delays, the authorities have decided that the relevant date for eligibility under the AA scheme is the date of filing the Bill of Entry—this is a legal customs document submitted to Indian Customs to get the goods cleared—that is, when the goods are cleared through Indian customs, not the date of shipment from the foreign country, another official added.
An email sent to the Directorate General of Foreign Trade (DGFT), which administers the AA scheme, and the Central Board of Indirect Taxes and Customs (CBIC), remained unanswered till the publishing of this article.

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