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DGFT Guru > Notification > Clarification on AA Export Obligation: Domestic Supplies vs. Physical Exports

Clarification on AA Export Obligation: Domestic Supplies vs. Physical Exports

Policy Circular No.- 01/2024-DGFT

Dated- 12th April, 2024 

The Directorate General of Foreign Trade (DGFT) recently released a policy circular (Policy Circular No. 01/2024-DGFT), offering clarity on fulfilling export obligations for Advance Authorisation (AA) holders. The circular specifically tackles concerns related to meeting export obligations either through physical exports or domestic supplies.

Detailed Analysis

The policy circular offers detailed guidance for AA holders issued under Customs Notification No. 18/2015-Customs and Customs Notification No. 21/2015-Customs, both dated April 1, 2015.

Choices for AA Holders under Customs Notification No. 18/2015-Customs (Para 7.02(A) (a) of FTP 2015-2020): 

  • AA holders issued on or after April 1, 2015, may choose to meet export obligations through physical exports or making domestic supplies. 
  • The circular aligns Para 4.14 of FTP 2015-2020 with Customs Notification No. 01/2019-Customs, providing AA holders with flexibility in fulfilling export obligations.
  • AA holders have the option to select from the following: 
    • Providing goods against Advance Authorisation/Advance Authorisation for annual requirement/DFIA (Para 7.02(A) (a) of FTP 2015-2020).
    • Supplying goods to EOU/STP/EHTP/BTP (Para 7.02A (b) of FTP 2015-2020).
    • Supplying capital goods against EPCG authorisation (Para 7.02(A) (c) of FTP 2015-2020).

Choices for Advanced Authorisation (AA) holders under Customs Notification No. 21/2015-Customs:

  • AA holders under this notification possess similar options for meeting export obligations, which encompass physical exports and domestic supplies as detailed previously.

Conclusion

The policy circular issued by the DGFT offers clarity for AA holders regarding the fulfillment of export obligations. 

By permitting flexibility in meeting these obligations through physical exports or domestic supplies, the circular seeks to enhance the efficiency of trade processes and support exporters. 

This guidance empowers AA holders to make informed decisions and adhere to regulatory mandates more effectively.

 

To view the DGFT notification, click here.

You may contact professional DGFT consultants for better assistance and to enhance your trade experience.

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