Advance Licence :
An Advance Licence is issued for duty free import of inputs which are physically incorporated in the export product. In addition, fuel, oil, energy, catalysts etc. which are consumed in the course of their use to obtain the export product, may also be allowed under the scheme. Advance Licence can be issued for
(i) Physical Exports
(ii) Intermediate Supplies
(iii) Deemed exports
Advance Licence can also be issued on the basis of annual requirement in respect of export / supplies aforesaid.
Advance Licence is issued for duty free imports of inputs, subject to actual user condition. Such licences (other than Advance Licence for deemed exports) are exempted from payment of Basic Customs Duty, Additional Customs Duty, Anti-Dumping Duty and Safeguard Duty, if any. However, Advance Licence for deemed exports shall be exempted from Basic Customs Duty and Additional Customs Duty only. Such licences are issued to
(i) Manufacturer exporter or main contractor in case of deemed exports
(ii) Merchant exporter where the merchant exporter agrees to the endorsement of the name(s) of the supporting manufacturer(s) on the relevant DEEC Book and in the case of deemed exports, subcontractor(s) whose names appear in the main contract
Such licences and / or materials imported there under shall not be transferable even alter completion of export obligation. Such licences shall be issued with a positive value addition. However, for exports for which payments are not received in freely convertible currency, the same shall be subject to specified value addition.
Advance Licence shall be issued in accordance with the Policy and Procedure in force on the date of issue of licence and shall be subject to the fulfillment of a time bound export obligation as may be specified.
The facility of Advance Licence shall also be available where some of the inputs are supplied free of cost to the exporter. In such cases, for calculation of value addition, the notional value of free of cost inputs along with value of other duty-free inputs shall be taken into consideration.
Ministry of Finance of Department of Revenue has issued Notification in respect of duty exemption on materials imported against an Advance Licence.
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