ADVANCE AUTHORIZATION SCHEME
DEFINITION
The advance authorization scheme, called AA which was earlier known as advance license, is an input duties neutralization scheme under the FTP, which intends to reduce the working capital requirements for exporters. Advance authorisation is an order which is issued to endorse the import of duty free inputs required by the manufacturer, which are then physically integrated into the export product with minimum 15% value addition. The inputs and its quantities are allowed either as per Standard Input Output Norms (SION)/or as per adhoc norms, based on the average consumption data of the relevant industry. Advance authorization (AA) usually has a validity period of 12 months, for the purpose of making imports, and a period of 18 months for the fulfilment of export obligation (EO) from the date of issue. The provisions of advance authorization extend to fuel, oil, energy & catalyst which are consumed or used to obtain export products. The import of commodities under this scheme is exempted from the payment of basic customs duty, additional customs duty, education, anti-dumping duty and safe guard duty.