Recently, the directorate general of foreign trade (DGFT) simplifies the composition fee for export obligation extension under the advance authorisation scheme.


About the Advance authorisation scheme

  • An advance authorisation scheme allows duty-free import of inputs, which have to be mandatorily used in products that are required to be exported within a specified time.
  • They are not allowed to sell the products in the domestic market.
  • Advance Authorisation is valid for 12 months from the date of issue of such Authorisation.
  • The revised composition fee formula is based on a specific rate for different levels of the ‘CIF (cost, insurance, freight) value of authorisation.
  • The fees levied under these 3 slabs; at ₹5,000 for a cost, insurance, freight (CIF) value of advance authorisation license valued at up to ₹2 crores, ₹10,000 for a value between ₹2 crore and 10 crores, and ₹15,000 for value over ₹10 crores.
  • The simplification of calculations for composition fees helps in automation and faster service delivery by making the process more efficient and easier to understand.