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.
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.