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Advance Authorisation

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At Global Tax Masters, we help Indian exporters leverage the Advance Authorisation Scheme, a key export promotion initiative under the Foreign Trade Policy (FTP), which enables duty-free import of raw materials used in the manufacture of export goods. This scheme is a vital tool to boost India’s exports, reduce production costs, and promote global competitiveness.

Why Choose Global Tax Masters?

10+ Years of Experience

  • Trusted by 500+ clients

Specialised DGFT Consultants

  • Expert support in Advance Authorisation application and compliance

End-to-End Assistance

  • From application to redemption, license amendments, extensions, and EO fulfilment

Annual Advance Authorisation

Exporters with prior export performance (in at least 2 preceding financial years) can apply for Annual Advance Authorisation based on:

  • 300% of previous year’s export value (FOB/FOR), or
  • ₹1 crore—whichever is higher

Subject to certain conditions, where an item is specified in SION, Advance Authorization can be issued for the annual requirements. It is not available on a self-declaration basis. Exporters need to have a past export performance in at least two preceding financial years, in order to be entitled to such authorization.

Duties Exempted Under
Advance Authorisation

Duties Exempted Under
Advance Authorisation

Duty-Free Importable Items

  • Inputs physically incorporated into the export product (after accounting for wastage)
  • Fuel, oil, and catalysts consumed in the production process
  • Mandatory spares that are required to be exported along with the resultant export product up to 10% of the CIF value of authorisation
  • Certain specified spices for industrial processing (not for simple re-packing or grading)

Value Addition Requirement

Minimum Value Addition (VA) under the scheme is 15%, calculated as:

VA = (FOB value of export – CIF value of imports) × 100 / CIF value of imports

  • For tea exports, the minimum value addition is 50%
  • Notional Value of free supplies from foreign buyers must be included in both import and export value while calculating VA

Export Obligation (EO)

Exporters must fulfil the Export Obligation as a condition to benefit from duty exemptions. EO must be completed within the validity period and failure to comply may attract penalties.

Eligibility Criteria for Advance Authorisation

  • Manufacturer exporters
  • Merchant exporters tied to supporting manufacturers Authorisation can be granted for
  • Physical exports
  • Intermediate supply
  • Deemed exports (as notified)
  • Supplies to foreign-going vessels/aircraft (where SION is available)

Validity of Advance Authorisation

Valid for 12 months from the date of issue.

Export Obligation must be fulfilled within 18 months or as notified by the DGFT.

For deemed exports, validity is either the project duration or 12 months—whichever is longer.

Export proceeds should be realized in freely convertible currency, unless otherwise specified.

How is Advance Authorisation Issued?

01.

Standard Input Output Norms

Predefined norms specifying input-output ratios.

02.

Self-Declaration

When SION is not available, an application can be submitted to DGFT.

03.

Pre-fixation of Norms

Exporters can apply for ad-hoc norms with the Norms Committee.

04.

Self-Ratification Scheme

For AEO-certified exporters, authorisation can be issued without Norms Committee ratification.

Why Choose Global Tax Masters?

  • 10+ Years of Experience: Trusted by 500+ clients
  • Specialised DGFT Consultants: Expert support in Advance Authorisation application and compliance
  • End-to-End Assistance: From application to redemption, license amendments, extensions, and EO fulfilment

Non-transferability & Actual User Condition

Advance Authorisation is issued under the Actual User Condition—meaning only the authorised importer (actual user) can use the license. The authorisation is non-transferable, even after completion of the export obligation.