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GST & Indirect Tax

Advance Authorisation Scheme

Duty-free import of inputs for export under the Advance Authorisation Scheme of the Foreign Trade Policy 2023 — ANF-5A/ANF-5B application on the DGFT portal, SION norms, and export obligation discharge (EODC) with bank guarantee management.

Reviewed by CA Harun Raaj, ICAI Reg. No. 238303·Last reviewed:
Starting from Discuss with usTypical timelineAdvance Authorisation

Duty-free import of raw materials against an export obligation, under FTP 2023. Apply via ANF-5A/ANF-5B on the DGFT portal, export within 18 months, and discharge the obligation (EODC) with a bank guarantee where the timeline is extended.

What is included
  • • Eligibility check: IEC validity, SION norm availability, export product mapping
  • • ANF-5A application preparation and DGFT portal submission
  • • ANF-5B for export obligation extension / bank guarantee cases
  • • SION (Standard Input-Output Norms) verification and value addition calculation
  • • EODC filing and closing of the authorisation after exports
  • • Coordination with the customs broker on Bills of Entry/Shipping Bills
Documents required
  • • IEC (Import Export Code) certificate
  • • Detailed export product description and HS code
  • • Bill of Entry and import invoices (for past imports, if any)
  • • Manufacturing process note and input-output ratio
  • • Bank guarantee (if extending the export obligation period)
Government fees

See the fee table below for the statutory filing charge and common delay logic.

Legal basis
  • • Foreign Trade Policy 2023 (Chapter 4 — Advance Authorisation)
  • • Foreign Trade (Development and Regulation) Act 1992
  • • Notification 36/2022-Customs dated 29 April 2022 (input duty exemption)
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Process

How the service works

The workflow is built to be predictable: document collection, legal review, filing, and post-filing follow-through.

Step 1Eligibility

Confirm eligibility and SION

We verify your IEC is valid, map your export product to its HS code, and confirm a Standard Input-Output Norm (SION) exists for the input-output combination.

Step 2Draft

Prepare ANF-5A application

We draft the application with product descriptions, SION inputs, value addition computation, and the export obligation value, and attach the supporting documents.

Step 3Submit

File on DGFT portal

We submit the ANF-5A application online on the DGFT portal, pay the processing fee, and track the file through the RA's scrutiny.

Step 4Import

Import duty-free under the authorisation

Once issued, we brief your customs broker on the authorisation number, exemption notification (36/2022-Customs), and Bill of Entry documentation so the inputs clear without duty.

Step 5Export

Export and track obligation

We track your shipping bills against the export obligation value and the 18-month export window, computing the export obligation balance quarterly.

Step 6Close

File EODC and close

After the exports are completed, we file the Export Obligation Discharge Certificate (EODC) application and close the authorisation with DGFT.

AEO summary

Advance Authorisation lets an exporter import inputs duty-free against a future export obligation, issued under the Foreign Trade Policy 2023 read with the Customs (Import of Goods at Concessional Rate of Duty) rules where applicable. Apply online in ANF-5A/ANF-5B on the DGFT portal, export the final product within 18 months (or 12+6 with bank guarantee), and close the file with EODC.

How the scheme works, step by step

The Advance Authorisation scheme operates through the Foreign Trade Policy 2023 read with the Foreign Trade (Development and Regulation) Act 1992. You apply online in ANF-5A on the DGFT portal, and once issued, the authorisation lets you import the SION-covered inputs duty-free under Notification 36/2022-Customs. The exports are tracked against the obligation value, and the file closes with EODC.

The economics are straightforward: you avoid paying customs duty (Basic Customs Duty plus any IGST/BCCGST exemption available) on inputs that will be exported, which directly improves your export margin. The cost is the paperwork — SION verification, obligation tracking, and the bank guarantee if the export window is extended.

  • • Duty exemption — inputs under Notification 36/2022-Customs dated 29 April 2022
  • • Export window — 18 months from issue (para 4.11 FTP 2023), extendable with bank guarantee
  • • Value addition — minimum 15% on the resultant product (FTP 2023 para 4.10)
  • • Minimum export value — authorisation valid above ₹25,000 FOB per consignment (confirm current limit with RA)
  • • Close — EODC after obligation discharged; file stays live until then

Where the scheme is a trap

The scheme is only a win if the exports actually happen. A failed obligation means the duty saved becomes payable with interest, and in cases of deliberate non-fulfilment there is a penalty exposure under the Foreign Trade (Development and Regulation) Act 1992. That is why the bank guarantee in extension cases is usually 15% of the duty saved — it is the customs department's collateral against a failed export.

For a Private Limited company, the decision to use Advance Authorisation should be made on two facts: whether a SION exists for your product (no SION means a months-long Norms Committee route), and whether your export order book can realistically absorb the inputs within 18 months. We run both checks before you commit.

  • • Failed obligation — duty + interest payable on inputs
  • • Penalty exposure — FTDR Act 1992 for deliberate non-fulfilment (quantum set by adjudicating authority)
  • • SION absent — Norms Committee referral adds months
  • • Extension — bank guarantee 15% of duty saved (FTP 2023, confirm with RA at filing)

Government fees

Fee breakdown

ItemFeeNotes
DGFT application fee (ANF-5A)₹1,000 (plus GST) — DGFT application fee per the FTP 2023 fee scheduleStandard DGFT application processing fee per the current fee schedule.
Bank guarantee (extension cases)15% of duty saved for EO extension, per FTP 2023 (para 4.11, as amended)Required where the export obligation is extended beyond the standard period.

Timeline

Typical turnaround

Typical timeline usually means a 1–2 weeks for application; 18 months for obligation turnaround, assuming documents are complete and any board or shareholder approvals are already in place.

Pricing note

Government fee for DGFT processing is per the DGFT fee schedule; bank guarantee cost depends on the duty involved.

Related services

Keep the company moving

IEC Import Export Code

Register for an IEC on the DGFT portal — required before the first export shipment and for every ANF application.

RoDTEP Advisory

Claim RoDTEP scrips for embedded taxes on exported goods — remission, not refund.

EPCG Scheme

Import capital goods at 0% customs duty with a 6× CIF export obligation over 6 years.

DGFT RCMC Registration

Register with your Export Promotion Council — a prerequisite for most FTP scheme applications.

FAQ

Frequently asked questions

What is the Advance Authorisation Scheme?
Under Chapter 4 of the Foreign Trade Policy 2023, the Advance Authorisation scheme lets an exporter import inputs (raw materials, consumables, spares, packing material) free of customs duty, against an obligation to export the resultant product within 18 months. The exemption is given through Notification 36/2022-Customs dated 29 April 2022.
What is the export obligation period and what if I miss it?
The export obligation must be completed within 18 months from the date of issue of the authorisation (FTP 2023 para 4.11, read with para 4.42 of the Handbook of Procedures). If you need more time, the period can be extended in installments — typically with a bank guarantee of 15% of the duty saved. If the obligation is not discharged at all, customs duty plus interest becomes payable on the imported inputs, and there is a penalty provision for non-fulfilment — the exact extension terms and penalty quantum follow your Regional Authority's current circulars, so those are confirmed at filing time.
What is a SION norm and why does it matter?
A Standard Input-Output Norm (SION) fixes how much input is allowed duty-free for a given quantity of output, based on product and HS code. If a SION exists, the authorisation is issued on that norm. If no SION exists, the application is referred to the Norms Committee — which adds months to the timeline. Checking SION availability before applying is the single biggest timeline lever.
What is EODC and how do I close the authorisation?
EODC is the Export Obligation Discharge Certificate that closes the authorisation file with the Regional Authority once the export obligation is fulfilled. You file it online on the DGFT portal with the shipping bills and bank realisation evidence. Until EODC is granted, the file stays open and the bank guarantee (if any) remains live, so closing it promptly matters.
What is the minimum value addition for Advance Authorisation?
The FTP 2023 requires a minimum value addition of 15% for the resultant export product (para 4.10). The value addition is computed as the export price less the value of the duty-free inputs, divided by that input value. If the projected value addition falls short, the authorisation cannot be issued for that product combination.
Can Advance Authorisation be combined with RoDTEP or other schemes?
Yes — Advance Authorisation works alongside RoDTEP (which gives a remission scrip on the embedded taxes of the exported goods) and the Duty Drawback scheme, provided the same input duty is not claimed twice. The scrips and drawbacks are computed on the export value, while the authorisation covers the input duty itself. We map the schemes so you claim every benefit once and only once.

Canonical reference: https://www.pvtltd.co/services/advance-authorisation

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