Context
Recently, the government capped the amount of gold that can be imported under the Advance Authorisation (AA) Scheme in order to strengthen monitoring of duty-free imports.
About Advance Authorisation (AA) Scheme
- The Directorate General of Foreign Trade (DGFT) administers the Advance Authorisation (AA) Scheme to promote exports.
- The scheme allows duty-free import of inputs used in manufacturing export products.
- Exporters can also import packaging material, fuel, oil and catalysts required during production.
- The scheme exempts imports from duties such as Basic Customs Duty, Integrated GST, Compensation Cess, Anti-dumping Duty and Safeguard Duty, subject to conditions.
- The government issues Advance Authorisation with an export obligation requiring exporters to ship the finished products within the prescribed period.
- Manufacturer exporters and merchant exporters linked with supporting manufacturers can avail benefits under the scheme.
- The scheme covers physical exports, intermediate supplies and specified categories of deemed exports.
- It also permits supply of stores to foreign-going ships and aircraft where Standard Input Output Norms (SION) are available.
- The authorisation remains valid for 12 months from the date of issue.
