Advance Authorization Scheme (AAS)

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• Recently, the directorate general of foreign trade (DGFT) said it has simplified the process of Levying Composition fees in case of extension of the Export Obligation Period under the Advance Authorisation Scheme (AAS).

Advance Authorisation Scheme (AAS)

• About:
  • AAS allows duty free import of inputs, which are physically incorporated in an export product. 
  • In addition to any inputs, packaging material, fuel, oil, and catalyst which is consumed / utilized in the process of production of export products, is also allowed.
  • The quantity of inputs allowed for a given product is based on specific norms defined for that export product, which considers the waste generated in the manufacturing process. 
  • DGFT provides a sector-wise list of Standard Input-Output Norms (SION) under which the exporters may choose to apply. 
  • Alternatively, exporters may apply for their own ad-hoc norms in cases where the SION does not suit the exporter.
  • Advance Authorisation covers manufacturer exporters or merchant exporters tied to supporting manufacturer(s).
• Prerequisites for Applying:
  • To apply for an Advance Authorisation scheme, an Import-Export Code (IEC) is required. 
  • Other prerequisites are mentioned in the Chapter 4 of Foreign Trade Policy and Handbook of Procedures.

Source: TH