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Understanding the Extension of Export Obligation Period (EOP) for Advance Authorisation: Explained in New Rules

Introduction to Advance Authorisation:
Advance Authorisation is a trade facilitation scheme that promotes exports by allowing businesses to import raw materials and components without paying customs duties. It is an initiative of the government aimed at boosting the country’s exports and supporting industries in sourcing necessary inputs. Under this scheme, eligible exporters are granted permission to import materials for manufacturing or processing goods that will eventually be exported. This exemption from customs duties helps reduce production costs and enhances the competitiveness of domestically produced goods in the international market. In this blog, we will discuss the extension of the Export Obligation (EO) Period and Import Validity period under Advance Authorisation.

Extension of Export Obligation (EO) Period and Import Validity Period:
The initial Export obligation period under Advance Authorisation is 18 months, and the initial Import validity period is 12 months. From the date of license issue, businesses have 12 months to complete the import and 18 months to complete the export. If the import or export is not completed within the validity period, an extension can be sought according to the policy provisions. In this blog, we will discuss the conditions for obtaining an extension, the application process, and the required documents.

Revalidation of Advance Authorisation License:
Extending the time for imports is referred to as “Revalidation of Advance License” in official terms. The initial validity is 12 months from the license issue date, and businesses can apply for a one-time extension for an additional 12 months, making it a total of 24 months. To apply for revalidation, an online application needs to be submitted to the Regional Authority of DGFT. The application/government fees for revalidation are Rs.500. The required documents for revalidation include a Request Letter, a Justification Letter, and Application Form ANF 4D. If there are remaining imports to be completed even after 24 months, further extensions cannot be obtained from the Regional Authority (RA) DGFT. In such cases, businesses need to approach the Policy Relaxation Committee (PRC) in Delhi, who may approve a further extension of 6 months in cases of genuine hardships.

Extension of Export Obligation (EO) Period for Restricted/Prohibited Items:
Advance Licenses can vary based on the type of products or conditions. For licenses issued for restricted or prohibited items, the Export Obligation (EO) period and terms for extensions may differ. One example is the recent permission granted for exporting Wheat flour [Atta] under Advance Authorisation. In this case, the initial Export obligation period is 180 days from the date of clearance of each import consignment, and no further extensions will be granted. However, for other types of licenses, such as General licenses, the initial EO period is 18 months, and two further extensions of 6 months each can be applied through the Regional Office of DGFT. The composition fees for these extensions have been converted to flat fees based on the CIF value of the Advance License.

Extension of Export Obligation (EO) Period under Appendix 4J:
Appendix 4J lists import items for which the Export obligation period is significantly reduced. Examples include drugs imported from unregistered sources and precious metals like gold, silver, and platinum. For such licenses, only one EO extension is allowed, limited to half the duration of the initial EO period. The fees for this extension vary depending on the type of item.

Required Documents for EO Extension:
To extend the Export Obligation (EO) period of Advance Authorisation, the required documents include a Covering letter or Request Letter, ANF-4D Application Form, Declaration as per para 4.42, Justification Letter, and a Duly-certified Import and Export Statement.

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AFLEO Group is a team of DGFT and Customs Experts with over 10 years of experience in Exim Consultancy and International Logistics. They also deal in Buy/Sell/RODTEP/ROSCTL/DFIA License. With their expertise and knowledge, they can handle all activities related to services in a hassle-free manner. Contact AFLEO Group today to learn more about their services and how they can assist in handling the logistics of global trade.

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