Duty Free Import Authorisation (DFIA)
The DFIA scheme, introduced on 1st May 2006 as a replacement for the Duty-Free Replenishment (DFRC) scheme, allows duty-free import of inputs for export production. Similar to Advance Authorization but with key differences, DFIA is issued only for products with notified Standard Input and Output Norms (SION).
Key Feature: DFIA License is transferable - both the license and imported inputs can be sold under the scheme.
DFIA Scheme Details
Scheme Provisions
- Duty Free Import Authorisation is issued to allow duty free import of inputs. In addition, import of oil and catalyst which is consumed / utilised in the process of production of export product, may also be allowed.
- Provisions of paragraphs 4.12, 4.18, 4.20, 4.21 and 4.24 of FTP shall be applicable to DFIA also.
- Export of white sugar under DFIA is allowed under SION Sl.No-E 52 till 30.9.2018 and DFIA in such cases shall be issued only on or after 1.10.2019. Such DFIAs shall be valid for imports till 30.9.2021
Duties Exempted Under DFIA
- Only the payment of basic customs duty (BCD) is exempted under the Duty-Free Import Authorisation scheme.
- IGST and compensation Cess are not exempted under the DFIA scheme.
Eligibility Criteria
Duty Free Import Authorisation shall be issued on post export basis
for products for which Standard Input Output Norms
have been notified.
Manufacturer exporter as well as Merchant Exporter are eligible to
apply for DFIA License. Merchant exporter shall be
required to mention name and address of supporting manufacturer of
the export product on the export document viz.
Shipping Bill/ Bill of Export / Tax Invoice for export prescribed
under the GST rules.
Application is to be filed with concerned Regional Authority
before effecting export under Duty Free Import
Authorisation.
· No Duty Free Import Authorisation shall be issued for an input
which is subjected to pre-import condition or where
SION prescribes „Actual User‟ condition or Appendix-4J prescribes
pre import condition for such an input. However, this
restriction is not applicable for „Raw Sugar‟ on exports made till
30.9.2018.
Minimum Value Addition
Value Addition Formula
A = FOB value of export realized or FOR value of supply received
B = CCIF value of inputs covered by the authorisation, plus the value of any other input used on which benefit of DBK is claimed or intended to be claimed. The minimum Value addition required to achieve is 20% under DFIA License.
Authorized Economic Operator (AEO)
The Authorized Economic Operator (AEO) Scheme is a program under the
guidance of the World Customs Organization (WCO),
SAFE Framework of Standards to secure and facilitate trade globally. An
AEO (Authorised Economic Operator) is a business
entity involved in the international movement of goods requiring
compliance with provisions of the National Customs law
and is approved by or on behalf of the national administration in
compliance with World Customs Organization (WCO) or
equivalent supply chain security standards.
The security standards are detailed in the World Customs Organization
Safe framework of standards [WCO SAFE FoS], which
is the basis of the Indian AEO Registration. There are 3 tiers of
certification in the new AEO certification program.
AEO Certification Tiers
AEO T1
It is verified based on document submission only
AEO T2
Along with T1 Compliance, document verification, and onsite verification is also done
AEO T3
For AEO T2 owner who has enjoyed the position for 2 years only based on document verification & for AEO (Authorised Economic Operator) T2 holders who have not enjoyed the status or have introduced major business changes, the applicant is subjected to physical verification.
AEO LO
There is document verification and onsite verification which is done considered for logistics providers, custodians or terminal operators, customs brokers, & warehouse operators there
AEO Benefits
- Self-declaration of Standard Input Output Norms (SION) is included under Para 4.07A of FTP 2015-20 for the AEO Exporters where the SION is not notified.
- Addition of the Direct Port Delivery of the imports safeguards timely inventory management by the manufacturers wanting to seek clearance from the wharf to the warehouse for AEO Certification T1, T2, and T3.
- Addition of the Direct Port Entry for the factory stuffed containers meant for export by AEOs
- Provision of deferred payment in customs duties. It guarantees delinking duty payment and customs clearance for AEO T2 and AEO T3.
- Mutual Recognition Agreements (MRA) with Customs Administrations for AEO T2 and AEO T3. MRA functions as an equalizer to complement the minor differences to safeguard seamless facilitation of benefits for the movement of goods across borders for the domestic AEO-accredited entities.
- Fast-tracking of adjudications and refunds, including disbursal of drawbacks and IGST refunds.
AEO Eligibility Criteria
- The Company must have handled a minimum of 25 documents (Shipping Bills or Bills of Entry) in the last Financial Year.
- The Company should have experience in Customs related work.
- The Company must be a part of the international supply chain.
- The Company must have had business activity in the last three Financial Years.