DFIA – Duty Free Import Authorisation : A duty exemption scheme

Duty Free Import Authorisation (DFIA) is allowance to encourage manufacturing of export product. In simple terms, it incentivises input imports to manufacture of export product with normal allowance for wastage such as fuel, energy, catalyst etc. The scheme is in existence since 1st May, 2006 and helps manufacturers reduce costs.

Today we will be talk about Duty Free Import Authorisation !

Table Of Contents

DFIA – An Overview
How is DFIA different from Advance Authorisation?
Who are eligible for the DFIA scheme?
How to apply?
General FAQ's

DFIA – An Overview

A Duty Free Import Authorisation is issued to allow duty free import of inputs which are used in the manufacture of the export product (making normal allowance for wastage) and fuel, energy, catalyst etc. which are consumed or utilised in the course of their use to obtain the export product

The Authorisation shall be issued on the basis of inputs and export items given under Standard Input and Output Norms (SION). The import entitlement shall be limited to the quantity mentioned in SION.
Such Authorisation can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s)
A minimum 20% value addition shall be required for issuance of such Authorisation.
Once export obligation has been fulfilled, request for transferability of the Authorisation or the inputs imported against it may be made before the Regional Authority. Once, transferability is endorsed, the Authorisation holder will be at liberty to transfer the duty free inputs, other than fuel and any other item (s) notified by DGFT for this purpose.

How is DFIA different from Advance Authorisation?

Advance Authorisation (AA) is issued for import of inputs at Zero duty (para 4.03 and 4.14 of current FTP 2015-20. It is granted prior to the completion of export obligation. The initial export obligation period is 18 months the minimum value addition (VA) required to be achieved is 15%. It is subject to actual user condition even after discharge of export obligation. On the other hand Duty Free Import Authorisation is issued for inputs from exemption of only basic customs duty after discharge of export obligation.
The DFIA shall be granted only where Standard Input-Output Norms (SION ) are available. The minimum value addition (VA) of 20% shall be required to be achieved. The Duty Free Import Authorisation is transferable – DFIA or Goods imported under it are transferable. The validity of Duty Free Import Authorisation is 12 months from the date of issue.

Who are eligible for the DFIA scheme?

Manufacturer exporter as well as Merchant exporter are eligible to apply for Duty Free Import Authorisation 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.

How to apply?

To apply for DFIA one can visit dgft.gov.in and fill up the form ANF – 4G. The documents required are mentioned in chapter-4 of Foreign Trade Policy (2015-2020) and Handbook of Procedures. IEC is mandatory for applying for any type of Authorisation Schemes.

Services > Advance Authorisation /DFIA > Apply for DFIA file number (ANF 4G) / Transferable

DFIA (ANF 4G)

Importers needs to register on DGFT Website by login on https://www.dgft.gov.in/
Link the existing IEC (For more details please see IEC section FAQ’s)
Register the DSC under My Dashboards > View and Register Digital Signatures Token.
For applying for “Transferable DFIA”, DFIA file number shall be generated.

Then,

My Dashboard > Submitted Applications
Enter Type of Scheme (Select in dropdown: Duty Free Import Authorisation (DFIA)) and Type

of Sub Scheme (Application for DFIA File Number)

Click on Search
Click on Action (Under the Results) > View Approved Letter

General FAQ’s

How to confirm if I can start with the exports after applying for DFIA File number?

Answer: On submitting application for DFIA file number, a file number is issued to the applicant. Applicant can start with the exports with reference to same file number and no approval is required from DGFT.
How to confirm if I can start with the exports after applying for DFIA File number?

Why Supporting manufacturer details are mandatory?

Answer: DFIA shall be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer.

What is minimum value addition required for applying for DFIA file number or Transferable DFIA?

Answer: Minimum value addition of 20% is required for applying for DFIA file number or Transferable DFIA.

Is DFIA benefit given for items procured indigenously?

Answer: DFIA Benefit will be given only on Inputs for which Customs Duty has been paid. DFIA Benefit will not be given on Inputs for which drawback is intended to be claimed and for Inputs which are procured indigenously.

Why I am not able to proceed after entering the export item details in the application form of transferable DFIA?

Answer: In such cases:
• Please make sure Shipping bill details are reflecting in the Shipping bill grid.
• Please make sure each item in the shipping bill grid is linked with export item details entered manually by the applicant.
• To link export item please click on “edit” and select the “Export serial No.” from the dropdown.

What is the application fees for DFIA?

Answer: Application fee for import License for restricted item / permission / certificate / Advance Authorization / DFIA / EPCG Authorization is one per thousand or part thereof subject to a minimum of INR. Five Hundred and maximum of Rupees one lakh on CIF value/duty saved amount of Authorization/ license / permission.

What is split DFIA?

Answer: DFIA can be split to a maximum of 20 in number, subject to a minimum of CIF value of INR 10 lakh each and multiples thereof may also be issued, on request at the time of seeking transferability. A fee of INR. 1000/- each shall be paid for each split authorization. Split-up DFIAs shall be permitted with the same port of registration as appearing on the original DFIA.

How can I apply for Split in DFIA?

Answer: Applicant is required to enter the split details in the application form for ‘Transferable DFIA’ before submitting the application.

What is late cut fees and how much it is imposed on transferable DFIA?

Answer: If application of “Transferable DFIA” is submitted after 12 months of date of issue of ‘DFIA file number’, late cut fees is deducted from the value of authorisation issued.
The application may be considered after imposing a late cut in the following manner:
• Application received after the expiry of last date but within six months from the last date -2%
• Application received after six months from the prescribed date of submission but not later than one year from the prescribed date – 5%
• Application received after 12 months from the prescribed date of submission but not later than 2 years from the prescribed date – 10%

Other related articles that will help you with new FTP 2021-2026:

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