Duty Exemption and Remission Scheme

The Ministry of Commerce and Industry has launched the Duty Exemption scheme that allows duty-free import of inputs that are required to produce exports. Under the Duty Remission Scheme, post-export replenishment duty is provided on inputs and used in the export products.  

The Duty Exemption and Remission Scheme consist of these schemes that are mentioned below: 

• Duty Exemption Scheme 

• Duty-Free Import Authorization (DFIA) Scheme 

• Advance Authorization will also include Advance Authorization for Annual Requirement 

• Duty Remission Scheme 

• Duty Drawback (DBK) Scheme administered by the Department of Revenue 

• Duty Entitlement Passbook (DEPB) Scheme 

Eligibility criteria 

• Advance Authorization can be issued to Micro, Small, and Medium Enterprises (MSMEs) or to a manufacturer exporter or merchant exporter tied to a supporting manufacturer.  
• Advance Authorization for pharmaceutical products manufactured through Non-Infringing (NI) process is involved in the export business.  
• Advance Authorization shall be issued for: 

 (I) Physical export (including export to SEZ);  

 (ii) Intermediate supply;  

 (iii)Supply of stores on board of foreign going vessel/aircraft, subject to the condition that there are specific Standard Input Output Norms in respect of item supplied. 

Benefits of the Duty Exemption and Remission 

The main highlights and benefits of the Duty Exemption and Remission Scheme are given below: 

• Issuance of an Advanced License that enables duty-free import of inputs that are physically present in the exported product. 

• The benefits will be provided for catalysts, energy, oil, fuel, etc., that are required to obtain the product. 

An advance License is provided for the following exports and supplies: 

• Intermediate supplies: The license is given to a manufacturer-exporter for the import of products to manufacture goods. However, the manufactured goods must be provided to a deemed exporter with an Advanced License. 

• Physical exports: The license is provided to a merchant exporter for the physical export of goods. However, the exporter must help manufacturers import inputs that are required to export products. 

• Deemed exports: The license is issued to the main contractor that imports products that are used for the manufacture of goods.