Focus: GS III: Indian Economy
Why in News?
Recently, the Directorate General of Foreign Trade (DGFT) implemented the Advance Authorisation Scheme under the Foreign Trade Policy, which allows duty-free import of inputs for export purposes.
Advance Authorisation Scheme:
- The Advance Authorisation Scheme permits duty-free import of inputs that are physically incorporated into an export product. It also includes inputs such as packaging material, fuel, oil, and catalyst consumed or utilized during the production process of the export product.
- Participants under this scheme are prohibited from selling the imported products in the domestic market.
- The validity period of an Advance Authorisation is 12 months from the date of issuance.
- This scheme is available to either a manufacturer exporter directly or a merchant exporter in partnership with a supporting manufacturer.
- It covers physical exports, intermediate supply, and supplies made to specified categories of deemed exports.
- The imported inputs under the Advance Authorisation are exempt from various duties, including Basic Customs Duty, Additional Customs Duty, Education Cess, Anti-dumping duty, Safeguard Duty, Transition Product-Specific Safeguard duty, Integrated tax, and Compensation Cess (if applicable), subject to specific conditions.