Advance Authorisation (AA)
Advance Authorisation (AA) is a DGFT export-promotion scheme that allows the duty-free import of inputs that are physically incorporated into an export product (with an allowance for normal wastage). It is issued against an export obligation — the holder must export a specified quantity or value of the resulting goods within a set period, achieving a minimum value addition.
The inputs are typically defined by Standard Input Output Norms (SION) or on a self-declared basis. Advance Authorisation is a major lever for manufacturer-exporters, letting them source imported raw materials without the cash outlay of customs duty, provided they meet and document the export obligation.
For a manufacturer-exporter, paying customs duty on imported inputs that will simply be re-exported as finished goods is dead cost. Advance Authorisation removes it — but only against a binding export obligation, so tracking inputs, exports and value addition to close the authorisation is essential to actually keeping the benefit.
What is the export obligation?
The requirement to export a specified quantity or value of the finished goods, with a minimum value addition, within the authorisation's validity — the condition for the duty-free import.
What are SION?
Standard Input Output Norms — the benchmark quantities of inputs allowed duty-free per unit of export product under the scheme.