Advance Autharisation

[GANESH IYER]

One of our Customer have an export order to Bangladesh..

they will import the Raw material form Bangladesh and will be paid in US DOLLER ..

they will manufacture the goods with a value addition go 21% and then will be exported to Bangladesh..

They will be getting the realization of export proceeds in Indian Rupees..

Can they apply for Advance Authorization??? Is it mandatory TO get export proceeds in US dollar ???

Can you clarify this ponit with the provision in FTP..'

[Raghunandhaanan rvi]

Dear Sir,

You may refer Para 2.52 of FTP in this regards. Here export proceeds in INR is allowed from Vostro Account

subject to certain conditions

AI Summary

Advance Authorization: export proceeds may be realized in local currency via vostro account under FTP conditions. Advance Authorization eligibility arises where raw material is imported from Bangladesh, goods undergo 21% value addition and are exported with export proceeds realized in Indian rupees. The operative guidance cited is the Foreign Trade Policy provision permitting export proceeds to be realized in Indian rupees from a vostro account, subject to the conditions stated in that policy paragraph, indicating such realization does not automatically bar Advance Authorization but requires compliance with those conditions.