Compliances to be adopted after taking an Advance License


Compliances to be adopted after taking an Advance License


On this weblog, we are going to cowl an important matter which is generally ignored & ignored by lots of the exporters i.e. what are the compliances to be adopted after taking an Advance Authorisation/Licenses in order that your Firm doesn’t entice any undesirable penalties from the Authorities Dept.


We are going to divide this weblog into 9 fast separate sections for simpler understanding.

Pre-requisite – Financial institution Assure (BG) at Customs

So in case you are new to the AA scheme, then it’s to be stored in thoughts that after Issuance of AA from DGFT. The AA License is registered at Customs by executing a Bond and/or Financial institution Assure.

There are some exemption notifications in place for executing a BG, nonetheless if you don’t fall beneath the exempted class, then you definitely have to be ready and make essential preparations for the Financial institution Assure.

Compliance as per Software Kind

Compliances beneath AA scheme varies as per the Software sort. Know extra in regards to the six software varieties beneath AA scheme and their significance please examine on

For Instance, If the applying is completed beneath [No norms-Self declaration basis], then after the License is issued from DGFT Regional Workplace. The exporter has to do follow-up for Fixation of norms at DGFT HQ, New Delhi. If the norms usually are not mounted in time or if they’re rejected, then the AA holder should pay total Responsibility saved + Curiosity.

Mentioning of Advance license No. on transport Payments.

So as soon as the uncooked supplies are imported after which the export will begin for fulfilment of export obligation.

Right here whereas exporting please be sure that to file the transport payments beneath Advance License scheme and point out appropriate Advance License No. & date.

Additionally be sure that the outline & HS code of export merchandise in transport payments matches with that of Advance license & Norms mounted by Norms committee.

Point out Amount of responsibility free inputs used

It is a essential compliance that ought to be adopted accurately.

For Instance, you could have taken an AA for export of 10,000 Nos. Males’s T-shirt & the uncooked materials allowed is Materials.

And now you might be doing a cargo of 1,000 Males’s T-shirt. So within the Delivery invoice it must be correctly indicated as to what amount of Material was used to make 1,000 Nos. of Males’s T- shirt.

This shall be checked by the DGFT authorities on the time of redemption/EODC software.

If any errors are present in declaring the amount whereas submitting the transport invoice, then the AA holder has to both amend the transport invoice or pay Customs Responsibility ​+ Curiosity on the distinction amount.

This compliance is to be additionally adopted for ARE-3 for provide to EOUs and Invoice of Exports for provide to SEZ Unit.

Third Celebration Export

In case you are meaning to fulfil the export obligation by doing third occasion exports. i.e. Merchandise shall be manufactured by you and export by a 3rd occasion service provider exporter beneath his transport invoice.

So within the transport invoice, please point out your AA No. & Date and together with that Please point out your title as a supporting producer.

If any of the circumstances usually are not met, then that specific transport invoice is not going to be thought of for success of export obligation.

Provide to Particular Financial Zone (SEZ Unit)

In case you are meaning to fulfil the export obligation by supplying to a SEZ Unit. Then 2 issues are essential.

Very first thing is to acquire a Invoice of export which is rather like transport invoice in case of Direct Exports.

Second factor is, the fee from SEZ unit ought to come from their overseas Forex Account (FCA Account)

If any one of many above is lacking, such provides is not going to be counted as exports.

Provide to EOU Models

For provide to EOU models to be counted as deemed exports, a duplicate of CT-3/ARE-3 duly signed by the jurisdictional excise/GST authorities certifying the merchandise of provide, its amount, worth and date of such provide ought to be obtained.

In case of Deemed exports, lots of the exporters don’t concentrate on correct documentation, because of which such provides usually are not thought of by DGFT for redemption and accordingly the AA holder must pay Customs responsibility + Curiosity.

Web to Web foundation Advance License

If an Advance License is obtained on Web to internet foundation, then the technical specification of the element together with Half No. / Mannequin No. if any ought to be talked about on the export paperwork like transport invoice/Bill and so on.

Additionally whereas making use of for Redemption in such circumstances an Accountability Certificates must be obtained from an Unbiased Chartered Engineer.

Correct Accounting

Final and eventually, when you have taken quite a lot of Advance Licenses, then correct Accounting & Audit ought to happen on common intervals. Attributable to lack of this, exporters typically make quite a lot of errors and find yourself paying for it to redeem the license.

Who’re We and How can we enable you?

We at Afleo Group, are a group of DGFT & Customs Consultants having a wealthy expertise of 10+ Years in Exim Consultancy & Worldwide Logistics [Freight Forwarding]. With our huge information and expertise on this discipline we are able to symbolize your case for all of the actions pertaining to the Advance Authorisation scheme and get it cleared in a trouble free method.

So do get in contact with us for any of your necessities and our group shall be joyful that can assist you.

Tell us when you have any doubts within the beneath part.

We request you to share this weblog together with your different Business mates, Commerce associations, as this info would possibly assist them as properly.

Thank You.