What Is Advance License Scheme [Complete Guide]

If you want to know what is the advance license scheme and how it will be helpful for manufacturer exporters?

You are on the right page!

Here you will get answers to all of your questions regarding the Advance license scheme.


Hello, friends welcome to another fresh article of “Indiancustoms.Info”, Here in this article I explained the use of importance of an advance license.

Advance license is also known as advance authorizations.

As a manufacturer exporter, you must be aware of incentive schemes provided by the Government of India.

The Advance Authorisations scheme is one of them. So, Now let’s take a look at what is Advance license scheme.

What Is Advance License?

What Is Advance License?

An advance license is an incentive scheme issued by the government of India.

The advance license is issued by the Directorate General of Foreign Trade (DGFT).

Under the advance license scheme, you can import goods duty-free, which are used in the manufacturing of final products.

You must export the final products manufactured from imported goods.

At the time of obtaining an advance license from DGFT, you need to give the details of import goods and what will be your final goods.

If you fail to complete the export obligations, then you need to pay the customs duty along with interest.

Now government simplifies the licensing process by Discontinuation of the physical copy of Advance/EPCG Authorisations for EDI ports.

Also Check:- Most Profitable Export Business In India [Ultimate Guide]

Discontinuation Of Physical Copy Of Advance/EPCG Authorisations.

There is good news from DGFT, From 01.03.2019 physical copy of Advance/EPCG Authorisations is not available for EDI ports.

This circular is only for EDI ports Licence registration is not applicable for manual ports.

Manual ports license registration process shall remain as same.

File No 01/94/180/275/AM19/PC-4
Government of India
Ministry of Commerce and Industry
Department of Commerce
Directorate General of Foreign Trade
Udyog Bhawan. New Delhi

Policy Circular No. 19/2015—2020

Dated: 14th February 2019

To

All Regional Authorities (RAs) of DGFT
All Customs Authorities
All EPCs/FIEO
Members of Trade and Industry

Sub: Discontinuation of the physical copy of Advance /EPCG Authorisations issued from 01.03.2019 onwards, for EDI ports.

In order to improve the ease of doing business and improving online transactions. it has been decided to discontinue issue of a physical copy of Advance/EPCG Authorisations issued on or after 01.03.2019 by Regional Authorities, in respect of EDI ports.

2. Applicants will continue to apply for Advance/EPC G Autliorisations as per current practice on DGFT website (www.dgft.gov.in). Regional Authorities will not issue any hard copy of authorisation to the applicants. Instead, in case of approval by the RA, the applicant will get the following message on the Mobile and email address (as filled in the eCommunication for e-Authorisation window) that,

“Authorisation No …….. dated………., .has been issued against RA File No……… …..No Authorisation on security paper is required to be issued, You can print/view Authorisation details online. “

3. In order to take a printout of the authorisation. The applicant needs to log on DGFT website (www.dgft.gov.in) choosing the respective scheme. After log in, in the first window. details of all applications submitted during the last one year will appear. Forgetting the status in respect of any particular file, the applicant needs to double click on that file. In case authorisation has been issued by the RA. the applicant can print/save the Authorisation. On the basis of PDF copy of Authorisation, the exporter can approach the Customs Authority concerned at registered EDI port for execution of BG/LUT. as the case may be In such cases the Customs Authority shall not insist for Authorisation on the security paper as was the practice so far.

4. Only the latest amended version of the Authorisation is available in the System in pdf format for print. Exporters are advised to print/save the Authorisation so issued/amended by the DGFT RA. on an immediate basis, at every stage [whether the fresh issue or amendment] for their record/future use.

5. RA will continue to examine the application as per current practice and, after approval. shall take a print out of the Authorisation on plain paper and keep the same in the relevant file. DGFT RAs shall also. as is being done earlier. continue to send the Authorisation details to other Agencies/Departments wherever required [a system generated version may be used by the RA for this purpose].

It is being emphasized that henceforth Regional Authority shall ensure that all data/information (including additional conditions or endorsements. if any) relating to the AA/EPCG so issued is transmitted to DGFT server at the end of each working day through ECOM client-server [as there is no scope for a paper copy]. Any amendment(s) made in AA/EPCG will be done by the Regional Authority on T + 2 working day [where T is the earlier transmission date for the Authorisation] to take care of the systems transmission lag.

6. The applicant intending to procure goods from domestic sources shall make a request for issue of Invalidation/ARO to the RA concerned. In such cases. as per the current practice. RA shall amend Authorisation making quantity and value invalid for direct import and issue the Invalidation Letter /ARO [endorsing one copy to a supplier of goods and another copy to RA of the supplier]. In all such cases, this will also be done by the Regional Authority on T + 2 working day [where T is the earlier transmission date for the Authorisation] to ensure data transmission to the DGFT/ Customs server without any error.

7. No TRA facility under such Advance/EPCG Authorisations issued from 01.03.2019 onwards will be available from EDI ports to non-EDI ports.

8. In case an applicant chooses a non-EDI port as Port of Registration while the filing application for Advance/EPCG Authorisation. the existing system of printing of Authorisation on security paper will continue.

9. Difficulties. if any. in the implementation of these provisions may please be brought to the notice of this Directorate immediately.

This is issued with the approval of Director General Foreign Trade.

(Vijay Kumar)
Additional Director General of Foreign Trade

Download the Original copy of Policy Circular No. 19/2015—2020

I hope now you understand What Is Advance License Scheme and how it impacts on export-import industry directly. Comment below if anyone has any suggestions or queries.

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