TaxTMI 
TaxTMI 
XYZ Ltd. Importing raw material under ‘Advance Authorization’. These goods will be directly sent to PQR (Supporting manufacturer) to manufacture finished goods. These finished goods will be purchased by XYZ from PQR where PQR will be charging 0.1% GST since XYZ will be exporting these goods as merchant exporter. XYZ will be showing these exports as fulfillment of export obligation against Advance authorization against which the raw material was imported by them. Is this transaction correct?
Advance Authorization and GST
27 Dec 2019 
4 Replies 
2002 Views Asked by
Advance authorization endorsement requirement ensures supporting manufacturer's name and joint liability for export obligation on shipping bill and authorization.
Advance Authorization permits direct supply of imported inputs to a supporting manufacturer only where the supporting manufacturer is endorsed on the authorization or allowed under Central Excise rules; the authorization holder and co-holders are jointly and severally liable for completing the export obligation and must furnish Bond/LUT in joint names, and shipping documentation should name the supporting manufacturer as per the authorization. (AI Summary)
Advance Authorization permits direct supply of imported inputs to a supporting manufacturer only where the supporting manufacturer is endorsed on the authorization or allowed under Central Excise rules; the authorization holder and co-holders are jointly and severally liable for completing the export obligation and must furnish Bond/LUT in joint names, and shipping documentation should name the supporting manufacturer as per the authorization. (AI Summary)