Clubbing of Advance Authorisation | Process Simplified |
What is clubbing of advance authorization?
Clubbing of advance authorisation refers to the practice of combining multiple advance licenses into a single license. Clubbing of advance authorization is done for transferring excess exports and imports from one license to another license to balance out the overall export obligation across all the consolidated advance licenses.
Advance authorizations are issued by the government and allow businesses to import certain raw materials or components duty-free or at reduced rates for the purpose of manufacturing of goods that are to be exported.
When can you go for clubbing of Advance Authorisation?
You can apply for advance license clubbing in case of shifting any surplus exports or imports from one license to another in order to fulfill the total export obligation among all merged advance licenses. The facility of clubbing will only be available at the time of redemption or regularization of licenses.
After clubbing of licenses, the DGFT will further restrict any kind of import or export using clubbed advance licenses.
What are other conditions for clubbing of Advance Authorisation?
- Clubbing of Advance Authorizations issued prior to March 31st, 2009 will not be permitted
- A request for license clubbing should be submitted in ANF-4C to the relevant RA who issued the Authorizations.
- Only authorizations in which the same duty exemption has been claimed will be permitted to be clubbed. These authorizations may relate to different financial years.
- Only authorizations that were issued within 18 months from the date of issue of the earliest authorization being sought to be clubbed, whether they are valid or not, shall be allowed to be clubbed. This is also subject to the condition that only imports made within 30 months from the date of issue of the earliest authorization will be taken into account upon clubbing.
- Exports made during the initial or extended export obligation period of individual authorizations will be clubbed.
- If a deficiency in value or quantity is detected upon license clubbing, it will be rectified by either paying duties/interest/penalties as per Paragraph 4.49 of Foreign Trade Policy – Hand Book of Procedures 2015-20.
- Clubbing of authorizations issued with different export obligation periods will also be permitted.
- Only inputs that are common in all authorizations can be clubbed. The duty-free inputs can be managed and controlled according to the SION/Ad-Hoc Norms established by the Norms Committee. It is not mandatory for all inputs in all authorizations to be identical.
- The Minimum Value Addition (MVA) as stated in the FTP and Procedures for the exported product must be maintained upon clubbing.
- After clubbing, Authorizations will be considered as one Authorization for all intents and purposes. The value addition will be determined based on the combined CIF and FOB arrived at after consolidating the Authorizations.
- All clubbed authorisation cases will be final and will not be reopened.
- Authorizations where fraud or misrepresentation has been identified will not be allowed to be clubbed, and Authorizations for which a redemption letter or adjudication order has already been issued will also not be permitted to be clubbed.
- The export obligation period for combined Authorizations will be calculated based on the date of the earliest import in any of the Authorizations being combined.
- Combining Authorizations will be allowed as long as all exports are completed within the initial or extended export obligation period calculated from the date of the earliest import in any of the Authorizations being combined.
How can you apply for Clubbing of Advance Authorisation?
- To club and close Advance Authorizations for services, the applicant must either select a draft application or start a new one. If starting a new application, the applicant must choose at least two Authorizations to be combined.
- They must then fill out the application form, pay any necessary fees, and submit the application for processing.
How can we help?
A V International is one of the leading and oldest DGFT/Customs Consulting firm operating pan India. Established in 1991, our company is headquartered in Mumbai.
Our company specializes in Advance Authorization cases; we can help in obtaining Advance License and also obtaining redemption/closure of the same with bond/bank guarantee cancellation. Additionally, we help in obtaining EOP Extension, Revalidation, Invalidation, Amendment, Clubbing of Advance Authorisation for our clients.
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