The Advance Authorisation Scheme (AAS), often referred to as the Advance License Scheme, is a duty exemption program by the DGFT that allows for the duty-free import of inputs physically incorporated into an export product.
By leveraging the Advance Authorisation license, Indian exporters can significantly reduce their production costs. Updated under the Foreign Trade Policy (FTP) 2023, this scheme ensures that taxes are not exported, keeping Indian goods competitive in the global marketplace.
The main objective of the Advance Authorisation Scheme is “Taxes should not be exported.” Since customs duties and GST are consumption-based taxes, goods manufactured for foreign consumption should logically be exempt from local duties.
An Advance License for export bridges this gap. To understand how this works, consider a garment exporter with Advance License:
When you utilise an Advance Authorisation, you are exempt from the following:
The Advance Authorisation Scheme is for those who are directly involved in the production of export goods. Eligibility is not restricted by turnover, but by the intent to manufacture and export.
Any entity that manufactures goods in India and exports them is eligible. The Advance license for export allows them to import raw materials for their own factory use.
Exporters who do not have their own manufacturing unit can still apply. However, they must be tied up with a supporting manufacturer. The Advance Authorisation License will carry the name of both the merchant exporter and the supporting manufacturer.
Entities providing services that involve the use of imported inputs (which are then exported as part of a service) are also eligible in specific categories (e.g., seafood processing or specific technical services).
Main contractors or sub-contractors supplying goods to Deemed Export categories, such as supplies to EOU/STP/EPCG holders or UN-aided projects, can apply for an advance import license to source their raw materials duty-free.
If you manufacture a component (e.g., fabric) and supply it to another exporter who makes the final product (e.g., trousers), you can apply for an advance authorisation for the intermediate supply.
Advance Authorisation allows the import of inputs that are physically incorporated into the export product. According to the Foreign Trade Policy, eligible items include:
Deemed Exports refer to those transactions where the goods do not leave the country, but the supply is treated as an export for the purpose of benefits. Eligible categories include:
The workflow for the Advance Authorisation Scheme involves coordination between the DGFT and Customs. Here is the standard procedure:
To ensure fair usage, the DGFT allows imports based on specific norms:
The advance license export obligation is a mandatory requirement. You must ensure:
These are the documents you must have to apply for an Advance License.
| Document Name | Purpose |
| Digital Signature (DSC) | Required to sign the online application |
| RCMC | Registration Cum Membership Certificate from your Export Council |
| SSI/MSME/Udyam | Proof of manufacturing status |
| GST Certificate | Valid GST registration proof |
| Export Order | (Optional) Recommended to justify input requirements |
We streamline the transition from duty-free import to final license closure.
We identify the most efficient path for your duty-free imports.
We secure your Advance License and handle port formalities.
We track your export obligation to prevent compliance lapses.
We secure your Export Obligation Discharge Certificate with precision.
Navigating DGFT norms and closing licenses can be complex. DGFT Guru brings over 30 years of experience to simplify this for you.
Generally, an Advance License is valid for 12 months from the date of issuance for making imports. The Export Obligation (EO) period is typically 18 months from the date of issuance.
No. The raw materials imported duty-free are subject to the Actual User Condition. They cannot be transferred or sold even after the export obligation is fulfilled, unless specifically allowed by DGFT.
If you fail to fulfil the export obligation, you are liable to pay the Customs Duty saved along with applicable interest (usually 15% to 18%) to the Customs Authority.
After completing your exports, you must submit proof (ANF 4F form, Shipping Bills, etc.) to the DGFT Regional Authority. Once verified, they issue an Export Obligation Discharge Certificate (EODC), which allows you to cancel your bond with Customs.
