What is duty-free Import Authorization (DFIA) Scheme?

Duty-Free Import Authorization (DFIA) scheme suggests that this post explains concerning duty-free Import Authorization scheme

DFIA is issued to permit the nontaxable import of inputs, fuel, oil, energy sources, the catalyst that are needed for the assembly of the export product. DGFT, by suggests that of Public Notice, could exclude any product(s) from the view of DFIA.

DFIA scheme

1. Duty-free Import Authorization is issued to permit the duty-free import of inputs. Additionally, import of oil and catalyst that is consumed/utilized within the method of production of the export product may additionally be allowed.
2. Provisions of paragraphs 4.12, 4.18, 4.20, 4.21 and 4.24 of FTP shall be applicable to DFIA conjointly.

Duties Exempted and acceptableness of Cenvat and disadvantage as per Indian Foreign trade policy 2015-20 (FTP 2015-20)

i. Duty-free Import Authorization shall be exempted solely from payment of Basic duty.

ii. Extra customs duty/excise duty, being not exempt, shall be adjusted as CENVAT credit as per DOR rules.

iii. Disadvantage as per rate determined and stuck by Central Excise authority shall be available for duty paid inputs, whether imported or indigenous, employed in the export product. However, in case such disadvantage is claimed for inputs not specified in SION, then someone should have indicated clearly details of such duty paid inputs conjointly within the application for duty-free Import Authorization, and as per the main points mentioned in the application, the Regional Authority should even have clearly supported details of such duty paid inputs within the condition sheet of the duty-free Import Authorization.

Eligibility

i. Duty-free Import Authorization shall be issued on post export basis for a product that standard Input Output Norms are notified.

ii. Merchant exporter shall be needed to say the name and address of supporting manufacturer of the export product on the export document viz. Shipping Bill / Airway Bill / Bill of Export / ARE-1 / ARE-3 etc.

Application is to be filed with concerned Regional Authority before effecting export under duty-free Import Authorizations.

Minimum value Addition

Minimum price addition of 200th shall be needed to be achieved. For things wherever higher value addition has been prescribed under Advance Authorization in Appendix 4C, an equivalent price addition shall be applicable for duty-free Import Authorization conjointly.

The Validity & transferability of DFIA under EXIM Policy 2015-20 (FTP 2015-20)

1. The applicant shall file an online application to Regional Authority involved before beginning export under DFIA.
2. Export shall be completed within twelve months from the date of online filing of application and generation of a file number.
3. While doing export/supply, the applicant shall indicate the file number on the export documents viz. Shipping Bill / Airway Bill/ Bill of Export / ARE-1 / ARE-3, Central Excise certified Invoice etc.
4. After completion of exports and realization of proceeds, request for supplying of transferable duty-free Import Authorization is also created to involved Regional Authority within an amount of twelve months from the date of export or six months (or beyond the regular time allowed by RBI for realization) from the date of realization of export proceeds, whichever is later.
5. The applicant shall be allowed to file application beyond twenty-four months from the date of generation of file number as per paragraph 9.03 of Hand Book of Procedures.
6. Separate DFIA shall be issued for every SION and each port.
7. Exports under DFIA shall be made up of one port as mentioned in paragraph 4.37 of handbook of Procedures.
8. No nontaxable Import Authorization shall be issued for an export product wherever SION prescribes ‘Actual User’ condition for any input.
9. Regional Authority shall issue transferable DFIA with a validity of twelve months from the date of issue. No, any revalidation shall be granted by the Regional Authority.

Sensitive things under duty-free Import Authorization as per IMPEX Policy 2015-20 (FTP 2015-20)

1. In respect of resultant products requiring following inputs, the exporter shall be needed to supply a declaration with relevancy technical characteristics, quality and specification in Shipping Bill:
2. Alloy steel together with stainless steel, Copper Alloy, synthetic rubber, Bearings, Solvent, Perfumes / Essential Oil/ Aromatic Chemicals, Surfactants, Relevant materials, marble, Articles manufactured from plastic, Articles manufactured from Paper and Paper Board, pesticides, Lead Ingots, Metal Ingots, acid, Relevant optical fibre reinforcement (Glass fibre, chopped / Stranded Mat, Roving woven emergence Mat), Relevant resin (unsaturated polyester resin, epoxy, vinyl ester resin, hydroxyethyl Cellulose), Lining Material.
3. Whereas supplying duty-free Import Authorization, Regional Authority shall mention technical characteristics, quality and specification in respect of on top of inputs within the Authorization.