Intermediate Advance Authorisation

[kamal chordia]

We would like to obtained intermediate advance authorisation from DGFT, What is the excise compliance after obtaining intermediate advance authorisation like preparation of documents to supply of goods to SEZ buyer, submission of documents to DGFT, Excise etc for redemption of this intermediate advance authorisation.

[YAGAY and SUN]

On the Bill of Export, the reference to AA should be mentioned and also on ARE-3. Endorsed copy of Bill of Export by Development Commissioner as proof of supply along with BRC should be submitted to Central Excise Department and DGFT for EODC etc.

[Ganeshan Kalyani]

I agree with the view submitted by Yagay and Sun.

[CSSANJAY MALHOTRA]

Dear Kamal,

Please note that sales to SEZ are treated as Physical Exports i.e. just like Exports to Countries outside India. You have to prepare ARE-1 and clear goods either on payment of duty or under BOND/LUT. Do mention Advance Authorisation No. on the copies of Invoices & ARE-1.

On Receipt of Payment, do request your Bankers to update online E-BRC so that the same may be filed with the copy of ARE-1 duly attested to the DGFT office for redemption /EODC of Advance Authorisation.

You need to submit ARE-1 Original = Duplicate with Central Excise for claiming rebate of duty, if you are not availing drawback against SEZ supplies or for release of Bond.

[Ganeshan Kalyani]

I would like stretch the discussion to know whether a DTA can transfer some goods to its EOU ? What would be the tax involved in doing so? Please discuss.

[CSSANJAY MALHOTRA]

Dear Mr. Ganeshan,

• EOU's normally provide CT-3 to DTA units for procuring material duty free.
• Any DTA unit desiring to clear material to EOU's have option available in FTP (Foreign Trade Policy) Chapter 4 to procure material against Advance Authorisation (Refer Notification No. 21/2015-Customs dated 01.04.2015). Clearances by DTA to EOU against AA is considered as "Deemed Export".
• Finished Goods will be cleared by DTA Units against ARE-3 with specific mention of Advance Authorisation No. on same and on Invoices also.
• E-BRC needs to be updated on receipt of payment from EOU.
• Copy of ARE-3/CT-3 alongwith Invoices needs to be submitted with office of DGFT for AA Redemption.

Hope above addresses your query. No Impact of Excise Duty in respect of sales to EOU. Only Sales tax will be charged which will be claimed back by EOU from concerned Development Commissioner.

AI Summary

Advance Authorisation: exports to SEZ treated as Physical Exports, require ARE filings, EODC documentation and e BRC updates.
Supplies to SEZ under an Advance Authorisation are treated as Physical Exports: show the AA number on invoices and ARE forms; reference the AA on the Bill of Export. Submit the Development Commissioner-endorsed Bill of Export plus BRC/e BRC to Central Excise and DGFT for redemption and EODC. Clear goods on duty payment or under bond/LUT; furnish ARE originals/duplicates to Central Excise for rebate or bond release. DTA-to-EOU clearances are treated as Deemed Export, use ARE-3/CT-3 and update e BRC for AA redemption.