Advance license

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11 July 2013 Advance Authorization Holder can make Export with duty or not

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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12 July 2013 Advance Licence is an export facilitation scheme, whereby, the exporter is permitted to import the input materials without payment of Customs duties and utilise them in the manufacture of goods, which are subsequently exported in discharge of the export obligation cast on such Advance Licence holder.

Chapter 4 of the Foreign Trade Policy (FTP) governs the Advance Licence scheme. The Department ofRevenue has also issued relevant exemption Notifications, time to time, to govern the imports against such Advance Licences.

Rebate of duty:
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Exports under Central Excise are governed either by Rule 18 or by Rule 19 of the Central Excise Rules 2002. Rule 18 provides for two types of rebates, viz.,

1.Rebate of duty paid on the manufactured excisable goods which areexported (final product rebate) and

2.Rebate of the duty paid on the materials which are used in the manufacture of such export goods (input stage rebate).

Rule 19 consists of three sub-rules, of which, Rule 19(1) provides for the export of manufactured excisable goods without payment of duty from a factory of manufacture / warehouse / any other approv
ed premises and Rule 19(2) prescribes the procedure for removal of any materials from a factory-warehouse / approvedpremises, without payment of duty,for use in the manufacture of goods which are
ultimately exported. Rule 19(3) prescribes the conditions/safeguards/procedures for the above said sub rules. In other words, Rule 19(1) governs the clearance of excisable goods (final products) without payment of duty and Rule 19 (2) provides for clearance of excisable goods (inputs)without payment of duty for use in the manufacture of export goods.