ADVANCE LICENCE OF PLASTIC PRODUCT

[abhishek Agarwal]

Dear Sir,

We would like to know the your opinion on below matter.

For exports of finished plastics goods advance licence is being issued by DGFT under which Import of duty free raw meterial is to be done & from that you can manufacture goods & export it.

My question is for example if for exports the domestic duty paid raw material is being used & exported (govt export obligation is fulfiled prior to import of duty free raw material) after the exports are done, can we import raw material & sell it on domestic market? The GST will be charged & will be paid.

Is it ok to sell the material in domestic market?

The problem here is the domestic raw material which was purchased to manufacture goods for exports so the difference of duty is a blocked funds from our costing which was calculated at the time of taking the orders.

Regards

Abhishek

[KASTURI SETHI]

No. You can import material after exports but cannot sell in domestic market as per Advance Authorisation conditions.

[CSSANJAY MALHOTRA]

Imports can be made after exports but the same has to be used for manufacture of FG which can be sold in domestic market on payment of GST. This is allowed under FTP.

You could have explored other options such as Refund of ITC where the goods are exported under Bond / LUT so that the funds may not be blocked even if the export clearances have been made under AA.

[Raghunandhaanan rvi]

You may refer Para 4.27 of Hand Book Procedure

AI Summary

Advance Authorisation: post export duty free imports must be used for manufacture; domestic sale requires GST compliance.
Advance Authorisation permits duty free imports to meet export obligations and imports after exportation must be used for manufacture under the scheme; such imported inputs cannot be freely sold domestically except where finished goods are sold on payment of GST in compliance with scheme conditions, and exporters may pursue Input Tax Credit refund routes (e.g., exports under bond/LUT) while observing Handbook Procedure requirements.