An Overview
In the Foreign Trade Policy, Duty exemption schemes were introduced to enable the duty-free import of raw materials or inputs required for the manufacturing of export products, which made life easier for the exporters.
- DFIA scheme was introduced on 1st May 2006 in place of the Duty-Free Replenishment (DFRC) scheme, and it is similar to the Advance Authorisation Scheme with certain differences.
- The license issued under the DFIA scheme allows duty-free import of – inputs or raw materials, oil, fuel, catalyst, energy resources, all required to obtain the export products.
- DFIA shall be issued only for the products for which standard Input and Output Norms (SION) have been notified; hence import entitlement must be limited to the quantity given in SION.
DFIA License is transferable; license or inputs imported can be transferred or sold under DFIA Scheme.
Duties Exempted under DFIA Scheme
- Only the payment of basic customs duty (BCD) is exempted under the Duty-Free Import Authorisation scheme.
- IGST and compensation Cess are not exempted under the DFIA scheme.
Eligibility under DFIA Scheme
- The DFIA license shall be issued on a post export basis for those products where standard Input-Output Norms are already notified.
- Manufacturer exporter as well as Merchant exporter are eligible to apply for DFIA License. Merchant exporter is required to mention the name and address of the supporting manufacturer in all the export document like shipping bills, bill of export/Tax invoice as specified under the GST rules.
- The applicant has to apply for an application to concerned DGFT RA before starting to export under duty-free import authorization.
- Duty-free import authorization shall not be issued for an import that is subject to pre-import condition. DFIA license shall also be not issued for an actual user condition or products mentioned in Appendix- 4J like Spices, Tea, Coconut oil, precious metals/Gold/Silver/Platinum, etc.
Minimum Value Addition under Duty Free import Authorisation scheme
Value Addition shall be: 
Where,
A = FOB value of export realized or the FOR value of supply received.
B = CIF value of inputs covered by the authorisation, plus the value of any other input used on which benefit of DBK is claimed or intended to be claimed.
- The minimum Value addition required to achieved is 20% under DFIA License.
DFIA Scheme Procedure – Steps to be followed for Duty Free import Authorisation scheme
Below are the steps to be followed Under Duty-free import authorization scheme:-
Step- 1: The applicant has to check exported item is applicable for DFIA in SION or not.
Step- 2: If the export item is eligible under SION norms, the applicant has to file an online application at the DGFT portal and get the File number.
Step- 3: Export should be done within 12 months from the date of issuing file no.
Step- 4: The applicant has to mention the generated file number on every export documents like shipping bill, Tax invoice, bill of export, etc.
Step- 5: After completion of export obligation, the applicant has to apply for a transferable DFIA license.
Step- 6: The applicant has to submit relevant documents like shipping bill, E-BRC, Tax invoice, etc. to concerned DGFT RA.
Step- 7: DGFT RA may check the submitted documents and if the documents are clear; the DGFT RA may issue the transferable DFIA license within 20-25 days.
Step- 8: Once the DFIA license is issued from DGFT RA, registration of the DFIA License should be done in customs for verification purposes.
Step- 9: Applicant can use the DFIA license for import or sell the license in the market.
Validity & Transferability of DFIA
- The Validity of transferable duty-free import authorization to import is 12 months from the date of the license issued by the DGFT RA. There would be no revalidation allowed by the DGFT RA.
- Separate DFIA Application will be issued for each Standard Input Output Norms (SION).
- For EDI & Non- EDI ports, a separate application has to be made to concern RA of DGFT under DFIA.
How we can assist you for DFIA scheme?
- We are a team of DGFT experts who can analyze the feasibility of the DFIA scheme for exports.
- We assist our clients in documentation in avoiding the delay in the process.
- After receiving the required documents, we prepare the application and make the online application and submit required hardcopy in DGFT.
- We coordinate with DGFT and other concerned departments until the issuance of the transferable DFIA license.
- In domestic procurement, we assist our clients in getting required invalidations from the DGFT RA.
- Lastly, we assist them in the redemption of the DFIA license at DGFT.
Why Afleo Consultants?
- 100+ Monthly DFIA Licenses filed: We only have the goal of providing very reliable services with the most competitive cost to the exporters under one roof.
- Social Media Presence: We wish to get every opportunity to grow our relationships with our clients and for which we made our presence on each social networking sites to update them about the latest Notifications, Circulars, Amendment done in foreign trade policies.
- 24/7 Telephonic Service: We believe in offering better and faster services to our clients who can't afford to wait until the morning for a problem to be fixed we are just a phone call away, they just need to call or drop a mail and we try to reach them as soon as possible.
- Aggressive Follow-up: We have a separate team for follow up with DGFT and have a great understanding of the working of DGFT office, which helps us in obtaining DFIA license & Closing it from DGFT without delay.
FAQ's
Under Duty free import Authorisation scheme DFIA license is issued by DGFT in which basic customs duty is exempted on the import of inputs required to obtain the export products. And it is issued for the export products for which SION are notified by DGFT.
DFIA scheme allows duty-free Import of inputs, fuel, oil, catalyst, energy sources for obtaining export products.
The applicant can refer to Public Notice. 82/2015-20/ dated 29.03.2019 to check the TMA Scheme benefit. Or can simply share the documents with us, and our team would get back to you with an excel report of eligible benefit shipping bill wise.
DFIA License | AA License |
Duty Free Import Authorization | Advance Authorization |
It is issued for inputs from exemption of only basic customs duty | It is issued for inputs at zero duty |
Minimum Value addition is 20% | Minimum Value addition is 15% |
It is granted after completion of export obligation. | Issued before export obligation completion |
The Validity period is 12 months from date of issue | Validity is 18 months from date of issue of license |
DFIA is transferable and can be sold. | AA is subject to actual user condition & is non-transferable. |
The applicant needs to apply for an online application with relevant documents. We have an expert team, who can help you to file online application and help you to get transferable DFIA license from DGFT RA.
Yes, inputs can be procured indigenously under DFIA license against ARO (Advance Release Order)/Invalidation Letter.
Export obligation shall be fulfilled by exporter under DFIA license. Export Obligation under DFIA scheme is in terms of Value addition and in terms of Quantity. All these data are mentioned in the license.
Transferability of DFIA License means the transfer of license or imported inputs except fuel after completion of export obligation, request for transferability is to be made before concerned RA of DGFT.
Applicants are required to submit a declaration for technical characteristics, quality and specifications in shipping bills. DGFT RA mentions all the above details in authorisation, Sensitive items include – alloy steel, stainless steel, copper alloy, solvent , perfume, chemicals, etc.
Under DFIA scheme government fee is 0.1% of the Duty saved value with a minimum fee of Rs. 500/-
It takes 20 – 25 working days to get DFIA License issued from DGFT.
Registration of License issued from DGFT under DFIA scheme should be done in customs for the verification purpose, DFIA license shall be issued for any one of Sea port or airport. Post registration, all the imports against said authorization shall be made only through that port.
Yes, It is mandatory to register DFIA license at Customs.
Yes, DFIA license is transferable in nature.
Yes, we can sell the license as it is transferable in nature.
Yes, We do help in selling of DFIA license and follow the transparent procedure of sale.
DFIA license is valid for 12 months from date of issue of license.
Recent Updates
- Notification on 31.03.2020: Extension of FTP 2015-20 till 31st March 2021:
All DFIA Licenses expiring between 01.02.2020 to 31.07.2020 get automatic extension for 6 months.
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