Advance Authorization Scheme under GST

The Advance Authorization Scheme is a facility provided to exporters to import inputs without payment of duty, subject to certain conditions. The scheme is governed by the Foreign Trade Policy (FTP) issued by the Ministry of Commerce and Industry.

Eligibility Criteria

Exporters intending to use imported inputs for manufacturing goods that are meant for export are eligible for the Advance Authorization Scheme. The scheme is also open to manufacturer exporters, merchant exporters, and service providers who are exporting services that utilize imported goods.

The following are the key conditions to be eligible for the scheme:

1. The exporter should be registered under GST and have a valid Import Export (IE) code.

2. The goods imported under the scheme should be utilized for manufacturing goods meant for export, or for providing services that are exported.

3. Exporter should not be on the list of defaulters maintained by the Directorate General of Foreign Trade (DGFT).

4. Exporter should not be subject to any investigation or prosecution under any law relating to customs, central excise, or service tax.

Process for Obtaining an Authorization

The following is the process for obtaining an authorization under the Advance Authorization Scheme:

1. The exporter should apply to the DGFT through the online portal for an authorization under the scheme.

2. The application should be accompanied by the required documents, including the shipping bills, invoices, and purchase orders, among others.

3. The DGFT will verify the application and issue an authorization if the exporter meets the eligibility criteria.

4. The exporter can then import the required inputs without payment of duty, subject to the conditions specified in the authorization.

5. Exporter should utilize the imported inputs for manufacturing goods meant for export, or for providing services that are exported, within a specified period.

6. Exporter should submit the required documents, including the bill of entry, to the customs authorities within the specified period.

7. The customs authorities will then verify the documents and allow clearance of the goods.

Conclusion

The Advance Authorization Scheme under GST is a useful facility for exporters who import inputs for manufacturing goods meant for export, or for providing services that are exported. The scheme enables them to import the required inputs without payment of duty, subject to certain conditions. Eligible exporters can obtain an authorization under the scheme by applying to the DGFT through the online portal and submitting the required documents. The scheme is an important tool for promoting exports and supporting the growth of the Indian economy.