By Harsh Ashar July 11, 2023

Advance Authorisation VS. DFIA Scheme

The Duty Exemption Schemes allows for the duty-free import of inputs necessary for export production. These schemes encompass Advance Authorisation Scheme and the Duty-Free Import Authorisation (DFIA Scheme), enabling exporters to import duty-free inputs for goods to be exported. An Invalidation letter can also be obtained for the purchase of domestic inputs under this scheme. We offer services for Duty Remission and the Duty Exemption Scheme and assists in accessing exemption benefits. These schemes provide an opportunity for exporters to obtain exemption at the input stage, reducing the amount of funds blocked by duties.

Below is the primary difference between Advance Authorisation Scheme and DFIA Scheme:

Particulars	Advance Authorisation	DFIA Scheme
Time of issue	Advance Authorisation is generally issued before the raw materials are imported so as to allow duty free import of inputs	DFIA is issued after the export proceeds are done. The DFIA License thereby issued after the requisite exports can be used for importing duty free inputs.
Export Obligation Period	The initial export obligation period is 18 months and can be extended	No Export Obligation as exports proceeds happen beforehand.
Minimum Value Addition	15%	20%
Transferability	No transferable as Advance Authorisation is issued subject to actual user condition	Freely transferable
License Validity	Advance License has 12 months import validity and 18-month export obligation period.	12 months from the date of issue
Norms	Advance Authorisation can be issued based on the SION Norms and on Self Declaration Basis (Ad-hoc Norms)	DFIA can be issued only based on SION Norms
Coverage	Under Advance Authorisation, the inputs to be imported are exempted from Basics Customs Duty (BCD) and IGST	Under DFIA, the inputs to be imported are only exempted from Basic Customs Duty (BCD)