Fixation of Norms | Norms Fixation for Advance Authorisation

Table of Contents

Fixation of Norms | Norms Fixation for Advance Authorisation

An Overview

According to Standard Input-Output Norms (SION), The exporter or applicant needs to make sure that the goods/input items which are imported are used in the export/output items. However, if the exporter intends to use additional inputs in the manufacturing process or higher wastage claim then the exporter can get norms changed for existing SION. Alternatively, if the export product does not fall into the SION List, in such cases also the exporter can get the norms fixed under para 4.07 of HBP. The application may be filed by manufacturer exporter and merchant-exporter. So the DGFT may require that the exporter to fix the norms for the quantum of inputs required per unit of the final export product. This is called Norms Fixation or Fixation of Norms under Advance Authorisation which happens at the DGFT, Headquarters, New Delhi.

The DGFT provides a sector-wise list of Standard Input-Output Norms (SION) under which DGFT specifies the required amount of input needed to produce a unit of output for export. There are many segments/product groups that are applicable under SION like Chemical and allied products, Electronics, Engineering, Food products, Handicrafts, Leather, Plastics, Sports, textile, and food products such as fish and other marine products.. etc.

Generally the DGFT issue notification for fixation and addition of SION on the DGFT website from time to time.

Here, we describe the various processes in respect of Norms Fixation/Fixation of ad-hoc Norms used for processing of Advance Authorizations.

Latest Updates

Circular No. 35/2015-20 dated 23.04.2020:
Extensions in Import Validity period and Export obligation period in Advance Authorisations/DFIA notified due to COVID-19 Pandemic.
Notification No. 57/2015-20 dated 31.03.2020:
As per the above Notification, “Imports against Advance Authorisations for physical exports are exempted from Integrated Tax and Compensation Cess up to 31.03.2020” is extended up to 31.03.2021.

Category of Norms

There are following two categories of norms:

Standard Input-Output Norms (SION)
Ad-hoc norms fixed

Category of Norms under Advance Authorisation

1. Standard Input-Output Norms (SION) :

Standard Input-Output Norms (SION) is a list of standard norms that define the number of inputs required to manufacture a unit of output for export purposes. It contains a list of more than 10,000 products under different sectors. If manufacturer exporter and merchant-exporter want to modify existing SION then an application needs to be submitted to DGFT Head office.

2. Ad-hoc norms fixed

If there are no Standard norms for a particular export product, then the Exporter has to approach the Norms Committee at DGFT New Delhi and get the norms fixed for the export item either through Prior fixation of Norms or Fixation of Norms after getting the Advance License. All such Norms fixed under this category are known as “Ad-hoc Norms Fixed”

How Exporter can Search Norms?

To Search existing SION norms see the below procedure:

Go to the DGFT website [https://www.dgft.gov.in/CP/]
Go to Regulatory Updates
Click on SION – here the exporter can see Chapter wise notes list
Click on the Chapter notes and then the exporter can view the existing SION of that chapter notes.

Here you will see the list of Chapter wise notes

[SION Chapter List]

Also, the exporter can see the Application Master Data of SION, Ad-hoc Norms, No norms/Self Declaration Norms in the following way:

Go to the DGFT website
Go to Regulatory Updates,
Click on Application Master Data
Then click on Standard IO Norms or Ad-hoc norms or SION Chapter wise Notes
Here the exporter can see the norms types, Export Product Group, ITS(HS Code) & its description

The below video is about the Fixation of Ad-hoc Norms under the Advance Authorisation scheme at DGFT Headquarters, New Delhi.

Many times, you have completed the Export obligation under the license and the license can be easily redeemed, but the norms have yet to be fixed by the Norms Committee, and as a result, you are unable to apply for Redemption. Because of this, it’s important to know how norms are fixed and the various kinds of norms committees that exist. And what if your Norms case is denied? This video will cover all of these topics.

Norms Committee (NC) Role for Fixation of Norms

There are 7 Norms Committee (NC) as per Indian Trade Classification (Harmonized System) – ITC (HS) of export products (Annexure A).

For different commodities, we have different Norms Committee.

Following are the details of Norms Committees along with product groups dealt with by each Norms Committee and respective HS Chapters relating to norms fixation.

[Norms Committee]

Roles of Norms Committee:

The applicant includes the project reports with the ad-hoc form application.
The Norms Committee reviews the application of the ad-hoc norms and then with the help of various technical consultants, determines the wastage proportion that the exporter should be eligible for.
Exporters, who do not agree with the decisions of the NC, can represent again to the concerned NC within 4 months from the date of the decision on ad-hoc norm fixation.
The NC sets and controls SION List.
The norms committee will make the effort to convert ad-hoc norms to Standard Input Output Norms (SION) within 6 months, and positively within 12 months from the date of ratification of ad-hoc norms.

Documents required for Fixation of Norms/Norms Fixation.

Following are the documents required for Norms Fixation under Advance License:

DGFT DSC.
Copy of IEC.
Application form ANF – 4B.
Copy Valid RCMC
Copy of GST Certificate.
Appendix – 4E – Chartered Engineer Certificate.
Appendix 4K
Application fees Receipt.
Production & Consumption data of preceding 3 financial years.
ADVANCE LICENCE copy if taken.
Details of earlier licenses obtained (if any) for the resultant product during the preceding two licensing years.
Copy of SSI/IEM/MSME.
Detailed technical Notes on manufacturing process [Manufacturing flowchart] along with technical justification for wastage claimed at each stage of the process.

Fixation of Norms procedure - How does the Norms Fixation work?

We can get norms fixed in two ways:

1. Prior Fixation of Norms

2. Fixation of Norms after obtaining the Advance Authorisation.

Please find an image below which explains all the above two ways in a simple manner-

[Fixation of Norms Procedure]

1. Prior Fixation of Norms:-

In the case where norms have not been notified and the applicant wants to get the ad-hoc norms fixed before making an application for Advance Authorization that is called Prior Fixation of Norms.

The applicant submit the ANF 4B and the prescribed documents physically to the concerned NC in DGFT headquarters.
The applicant can also submit the application online. In this case, the concerned NC will get selected automatically according to the products for fixation of SION/Ad-hoc norms.
It is important to make sure the ANF 4B and prescribed documents are prepared error-free.
After providing all the required data in the application, submit the application.
The norms committee shall try to either fix these norms or provide ad-hoc norms on the basis of the application made.
The decisions of the Norms Committees will be available on the DGFT website.
Any ad-hoc norm fixed under this procedure shall be valid for one authorization for which such application is made and no-repeat authorizations shall be issued. However, Norms Committee can extend the validity period by two years from the date of fixation of such ad-hoc norms.
The applicant will apply for Advance Authorization for fixed ad-hoc norms.
The authorization shall be issued for import based on these ad-hoc norms.
Then the applicant proceeds to complete the import & export obligation.

2. Fixation of Norms:

The prior fixation of norms consumes a lot of time & money. So DGFT decided under Para 4.07 of the HBP to process the Norms Fixation applications simultaneously with the Advance Authorization application.

Advance License will be applied to the DGFT with the necessary above documents and at the same time, the copy of the application goes to the concerned Norms Committee.
Such application needs certification by an Independent Chartered Engineer.
The concerned norms committee will review the application, and approve and finalize it.
The concerned norms committee prepares the Minutes & uploads them on the DGFT website.
Meanwhile, the applicant can complete the import.
Rest all the procedure remains the same like the exporter will complete the export obligations in the given period.

How can we assist you with Norms Fixation?

We help you in preparing documents for the application of Norms Fixation at DGFT Headquarters.
Coordination with Norms Committee and various technical officers/members for proper presentation of the case.
Obtaining ad-hoc norms fixation.
Obtaining Norms Fixation from Norms Committee.
Guiding regarding the procedural requirement & Compliances to be followed by the Client after issuance of Norms Fixation.
Obtaining Amendment and handling rejection of Norms.

We assist in Ad-hoc Norms Fixation of Advance Authorization where the export has been made and redemption is pending for Fixation of Norms.

Moreover, the fixation of SION needs an in-depth analysis of the range of products being manufactured and we have professionals in our team who are industry experts.

Why Afleo Consultants?

There are many products already fixed but still many products have not been listed under S.I.O.N. so the exporters are unable to get duty-free import Advance Authorization entitlement. We do all kinds of Norms Fixation, Ratification &Ad-hoc Norms from Delhi DGFT. We will manage norms fixation in such a manner that the approval time for norms fixation will be very less. We are the leading Import Export Consultant (DGFT & Customs Expert) having a client base across India. We provide all the services related to DGFT which include the MEIS scheme, EPCG, SEIS, Advance Authorisation, DFIA, RoSCTL scheme, TMA scheme, RoDTEP scheme, etc. Our vast experience and immense knowledge have made us unmatchable in our field.

FAQ’s

What is Standard Input Out Put Norms (SION)?

The inputs and outputs items which are fixed in Hand Book of Procedure Vol. II published by DGFT and It is called Standard Input Out Put Norms (SION).

What is an Ad hoc norms?

The Input Output norms for an export product for which there is no SION (Standard Input Output Norms) notified by DGFT is an Ad hoc norms.

What is Ad-hoc Norms Fixation?

Ad-hoc norms are specific Input-Output norms for an export product for which there is no SION (Standard Input Output Norms). In such cases, the DGFT issues the licenses based on self-declaration by the applicant. Post which, these norms are approved by the Norms Committee (NC). This is called Ad-hoc Norms Fixation.

What is Fixation of Norms?

The Fixation of norms means, there are cases where norms have not been notified or where applicant wants to get the ad-hoc norms fixed before making an application for Advance Authorization.

Which form need to submit for Fixation of Norms?

The exporter or applicant needs to make sure that the goods/input items which are imported are used in the export/output items. However, if the exporter intends to use additional inputs in the manufacturing process & higher wastage claim then he is required to get the norms changed for existing SION and that is why Norms Fixation is needed.

What is Norms Committee?

Norms Committee (NC) is the committee of DGFT headquarters officers for fixations of norms. At present, there are 7 Norms Committees according to the sector for fixation of ad-hoc norms. This committee consists of technical experts from various ministries besides officials from the Department of Revenue and the DGFT. Norms Committee, Who determines, how much of what input is required for the manufacture of a unit of the export product. The NC at the office of DGFT fixes the ratio of inputs to output called the input-output ratio or the norms. The NC will provide the approval of ad-hoc input-output norms in cases where SION does not exist and where the applicant wants to get the ad-hoc norms fixed before making an application for Advance Authorization.

Why Fixation of Norms needed?

Yes, there is no separate portal for RCMC. The application is to be done on the DGFT website only. Also no need to contact Councils separately.

Where we need to apply for Norms Fixation?

One can apply for fixation of Norms to the Norms Committee at DGFT (Head Quarters), New Delhi

How can we assist you for Norms Fixation?

Our experts assist you in getting norms fixations for your inputs & outputs from DGFT as under:

We help you in preparing documents for application of Norms Fixation.
Obtaining Norms Fixation from Delhi-Director General of Foreign Trade.
Guiding regarding the procedural requirement & Compliances to be followed by the Client after issuance of Norm Fixation.
Obtaining Amendment, Enhancements or Extension for the Advance License for which norms is fixed.

What is Self-Declared Norms?

Under this method, an exporter can apply for an Advance Authorisation License on a self-declaration basis, if the required export product is not there in the SION or he is not satisfied with Import Quantity allowed. Here, he will select the Import Items and Quantity of Import Items as per his requirement. In this method, the Applicant has to apply to the Norms Committee (DGFT Delhi) for fixation of Ad-hoc Norms and get the Norms Ratified. The advance License will be closed only if the norms are ratified/approved by the Norms Committee. However, if the applied norms are not accepted by the Norms Committee, then the applicant has to pay Customs Duty + Interest on the excess import quantity and close the Advance License.

Can I export without an RCMC?

With the exception of certain products, it is not mandatory. But having an RCMC is highly recommended as it provides benefits, incentives, and ensures compliance with regulations, which can enhance your export activities.

What is Prior Fixation of Norms?

Under this method of norms fixation, the exporter has to first approach the Norms Committee and get the norms fixed/ratified. Only then DGFT will issue an Advance License based on the fixed norms.

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Fixation of Norms | Norms Fixation for Advance Authorisation