Advance Authorisation Scheme (AAS) or Advance License Scheme is a duty exemption scheme issued by the Government of India (GOI) under the Foreign Trade Policy 2015-2020.
The scheme exempts the payment of import duties on raw materials/inputs required for manufacturing products for export. In addition to any inputs, packaging material, fuel, oil, and catalyst which is consumed/utilized in the process of production of export product, is also allowed. Under the Advance License, imports are exempted from payment of Basic Customs Duty (BCD), Additional Customs Duty, Education Cess, Anti-dumping Duty, Countervailing Duty, Safeguard Duty, Transition Product Specific Safeguard Duty, etc.
The idea behind Advance Authorisation Scheme (AAS) is to enhance the competitiveness of Indian products in the global market, as the import of raw materials/inputs can be brought at zero customs duty for the production of export products. Exempting duties on raw materials automatically reduces the expenses of the final export product.
The Directorate General of Foreign Trade (DGFT) organisation is an attached office of the Ministry of Commerce and Industry and is headed by the Director General of Foreign Trade. To make the norms fixation process more efficient, the DGFT has implemented a user-friendly and searchable database of Ad-hoc Norms fixed in the previous years. These norms can be used by any exporter without requiring a Norms Committee review as outlined in the Foreign Trade Policy 2023. The database is hosted on the DGFT Website (https://dgft.gov.in) and allows users to search using Export or Import Item Description, Technical Characteristics, or Indian Tariff Classification ITC (HS) codes. If an ad-hoc norm matches the item description, specified wastages, and complies with the provisions outlined in the Handbook of Procedures (HBP), applicants may choose to apply for an Advance Authorisation under the “No-Norm Repeat” basis. This option allows users to obtain advance authorisation without approaching the Norms. This trade facilitation measure simplifies the advance authorisation and norms fixation process, resulting in shorter turnaround times for exporters, improved ease of doing business, and reduced compliance burden.
List of items eligible to be imported without payment of duty under the scheme:
- Physically incorporated inputs that have to be exported after making a normal allowance for wastage.
- Fuel, oil, and catalyst consumed/ utilized for acquiring the export product.
- Spare those are mandatory to be exported along with the export product- up to 10% of the CIF value (Cost, Insurance, and Freight) of Authorisation.
- Spices that are specified to be allowed for a duty-free import, only to be utilized in activities like crushing, grinding, sterilization, manufacture of oil or oleoresin, and not for simpler activities like cleaning, grading, re-packing, etc.