Merchant exporter does have manufacturing unity

[Dinesh kumar]

Why does a merchant exporter obtain an advance license when he exports raw materials even though he doesn’t have a manufacturing unit? How does he use the raw materials?

AI Summary

Advance license use by merchant exporters enables duty free import when tied to a supporting manufacturer for export.
A merchant exporter may obtain an Advance Authorization to import raw materials duty free by declaring a supporting manufacturer who consumes those inputs. The merchant exporter retains ownership, sends materials to the supporting manufacturer under bond/challan/CT 3/ARE 3 procedures, receives finished goods, and exports them to meet the license's export obligation.