Advance Authorisation Scheme

Why in news?

• The Directorate General of Foreign Trade (DGFT) has implemented the Advance Authorisation Scheme under the Foreign Trade Policy, which allows duty-free import of inputs for export purposes.
• The eligibility of inputs is determined by Sector-specific Norms Committees based on input-output norms.

About Advance Authorisation Scheme:

• It allows the duty-free import of inputs, which are physically incorporated into 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 product, is also allowed.
• DGFT provides a sector-wise list of Standard Input-Output Norms (SION) under which the exporters may choose to apply.
• Advance Authorization is valid for 12 months from the date of issue of such Authorization.

PRACTICE QUESTION:

With reference to ‘Advance Authorisation Scheme’, consider the following statements:

1. It allows duty-free import of inputs, which have to be mandatorily used in products that are required to be exported within a specified time.

2. The scheme is not applicable to products that sold in the domestic market.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer