DGFT Guru > Duty-Free Import Authorisation (DFIA) Scheme

Duty-Free Import Authorisation (DFIA) Scheme

The Duty-Free Import Authorisation (DFIA) Scheme is issued under the Foreign Trade Policy. The DFIA License enables duty-free import of inputs used in manufacturing export products, making allowance for wastage, and energy, fuel, catalyst, etc.

To replace the Duty-Free Replenishment (DFRC) Scheme, the DFIA scheme was introduced on 1st May 2006. This scheme has features similar to the of the Advance Authorisation Scheme, however, there are certain distinct features as well.
DFIA is issued specifically for the products that have been notified under the Standard Input and Output Norms (SION). Thus, import entitlement should be according to the limit specified by the SION.
The DFIA License is freely transferable. The license of imported inputs can be transferred or sold beneath the DFIA Scheme.

What are the exempted duties underneath the DFIA Scheme?

The DFIA License only exempts the payment of Basic Customs Duty (BCD).
IGST and the Compensation Cess aren’t exempted under the DFIA Scheme.

What are the eligibility criteria for claiming benefits under the DFIA scheme?

The DFIA License must be issued based on the post exports for the products that are notified by the Standard Input -Output Norms.
All the exporters, manufacturers, or merchants are eligible for applying to get the DFIA License. The merchant exporters must mention the name and address of the supporting manufacturer in every document, the shipping bills, bill of exports/ tax invoice as notified by the GST rules.
To export under the duty-free import authorization, the exporter needs to first apply for an application to the concerned DGFT RA.
DFIA License won’t be issued for an actual user condition or products specified under Appendix-4J such as spices, tea, coconut oil, precious metals, etc.
An import that is subject to pre-import conditions, isn’t eligible to get duty-free import authorization.

Steps to apply under Duty-Free Import Authorisation Scheme?

Before initiating exports under the DFIA Scheme, the exporter has to apply for an application online to the regional authority.
The exports must be completed within 12 months of filing the application for the DFIA.
During the time of exports, it is compulsory for the applicant to mention the file number on the documents for exports, such as ARE-1, ARE-3, Shipping Bills, Bill of Exports, etc.
After the completion of exports and realization of the proceeds, the applicant can file a request for issuance of transferable DFIA to the specified Regional Authority. This request must be filed within the 12 months period from the date of export or within the time duration of 6 months from the realization of export proceeds, whichever is later.
A separate DFIA License shall be issued for each SION and port individually.
Exports under the DFIA Scheme must be made from a single port.
The DFIA shall not be issued for export products that are prescribed under the SION as actual user conditions for any input.

Validity and Transferability conditions of the DFIA Scheme?

Under the DFIA Scheme, the validity of the transferable DFIA License is 12 months from the date of issuing by the DGFT Regional Authority.
A separate DFIA Application will be issued for every SION.
Under the DFIA Scheme, for EDI and Non-EDI ports, a separate application is required in concern with the Regional Authority of the DGFT.

How can the Gurus assist you to maximize your benefits under the DFIA Scheme?

The DGFT Gurus have export experts who specialize in the field of analyzing the practical implementation of the DFIA Scheme for exports.
We assist our clients in the documentation process to get it completed at the earliest.
After the issuance of all the documents required, an application is prepared to be applied online and submit the hardcopy required in the DGFT.
We also coordinate with DGFT and the other associated authorities until the issuance of the transferable DGFT License.
We assist our clients in attaining the essential invalidations from the DGFT RA in domestic procurement.
We also offer our DGFT Consulting services in assisting our clients in the process of redemption of the DFIA License at DGFT.

Why the Gurus for DGFT Consultancy?

The aim is to provide reliable and effective strategies that can be structured only with an intense study and analysis. The DGFT Gurus have experience of over 30 years in the field, which enables them to combine experience with modern-day strategies to get optimum results.
We are available 24/7 at your service to make sure there’s no delay in the process.
We tend to enhance our knowledge and keep up with the updates about the latest notifications, circulars, amendments done in Foreign Trade Policy.
We also keep in touch and take regular follow-ups from the authorities to get things done in the least time possible.
Our consultancy advisors, with their proficiency in the field, would be by your side to give you a profitable outcome.

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FAQ

What is duty-free import authorization?

DFIA i.e the Duty-free authorization permits exporters to import inputs that will be used to manufacture and export products. The scheme is issued under Foreign Trade Policy and makes allowance for energy, catalyst, fuels, and wastages.

The inputs under this scheme are specified in the Standard Input Output Norms. The exporters can only avail those products that fall under this norm. Hence, inputs demanded by exporters should be specified in Standard Input Output Norms

The DFIA License is freely transferable. The license of imported inputs can be transferred or sold beneath the DFIA Scheme.

What is allowing duty-free import?

Allowing Duty-free import signifies the exemption of duty on import of raw materials by exporters. There are several duty exemption schemes enabling duty-free import of inputs required for export production. Duty exemption schemes consist of:

a) Advance Authorisation scheme

b) Duty-Free Import Authorisation (DFIA) scheme

What is the minimum value addition under duty-free import Authorisation?

Minimum value addition of 20% is required while filing for a Duty-free authorization file number or even for transferable Duty-Free Authorization. In Appendix 4C, i.e under the advance Authorization scheme the items with higher value addition have been prescribed. It is also applicable for Duty-Free Import Authorisation.