ADVANCE LICENCE

[SHIVKUMAR SHARMA]

Dear Experts

one of my freind want to procure raw material from domestic market agst.Advance licence without payment of central excise duty. The Finished goods produced will be exported.Pls.guide us in the following points.

1. what will the document to be given to Raw material supplier by purchaser.

2.What remarks to be mention in the invoice by Raw material supplier.

3. whether manufacturer supplier of material can supply the material without payment of duty

agst. Advance licence.

Pls give any refrence of Notification /Circular for Export under advance licence.

AI Summary

Advance Licence procurement allows duty-free domestic supply as deemed export when supported by required authorizations and ARE form.
Procurement against an Advance Licence permits duty free domestic supply for exported finished goods, contingent on authorisations. The licence holder must obtain Advance Licence and, where required, fix input norms by SION or self declaration. Prior to purchase the holder must provide the supplier with the Advance Licence plus supporting authorisations such as an ARO, invalidation letter, or back to back inland letter of credit. Suppliers must quote these references on the invoice and ARE form. Such supplies qualify as Deemed Export, allowing supply without payment of central excise duty under ARE procedure and Foreign Trade Policy; procurements from EOU/STP/EHTP need only the licence endorsed by the Assistant Commissioner of Excise.