Duty Free Import Authorisation DFIA Scheme

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.

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.

(a) Duty Free Import Authorisation is issued to allow duty free import of inputs. In addition, import of oil and catalyst which is consumed / utilised in the process of production of export product, may also be allowed.

(b) Provisions of paragraphs 4.12, 4.18, 4.20, 4.21 and 4.24 of FTP shall be applicable to DFIA also.

(c) Export of white sugar under DFIA is allowed under SION Sl.No-E 52 till 30.9.2018 and DFIA in such cases shall be issued only on or after 1.10.2019. Such DFIAs shall be valid for imports till 30.9.2021

• 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.

• Duty Free Import Authorisation shall be issued on post export basis for products for which Standard Input Output Norms have been notified.
• Manufacturer exporter as well as Merchant Exporter are eligible to apply for DFIA License. Merchant exporter shall be required to mention name and address of supporting manufacturer of the export product on the export document viz. Shipping Bill/ Bill of Export / Tax Invoice for export prescribed under the GST rules.
• Application is to be filed with concerned Regional Authority before effecting export under Duty Free Import Authorisation.
• No Duty Free Import Authorisation shall be issued for an input which is subjected to pre-import condition or where SION prescribes „Actual User‟ condition or Appendix-4J prescribes pre import condition for such an input. However, this restriction is not applicable for „Raw Sugar‟ on exports made till 30.9.2018.

Value Addition shall be:

Where,

A = FOB value of export realized or the FOR value of supply received.
B = CIF value of inputs covered by the authorisation, plus the value of any other input used on which benefit of DBK is claimed or intended to be claimed. 

The minimum Value addition required to achieved is 20% under DFIA License.

Below are the steps to be followed Under Duty-free import authorization scheme:-

Step- 1: The applicant has to check exported item is applicable for DFIA in SION or not.

Step- 2: If the export item is eligible under SION norms, the applicant has to file an online application at the DGFT portal and get the File number.

Step- 3: Export should be done within 12 months from the date of issuing file no.

Step- 4: The applicant has to mention the generated file number on every export documents like shipping bill, Tax invoice, bill of export, etc.

Step- 5: After completion of export obligation, the applicant has to apply for a transferable DFIA license.

Step- 6: The applicant has to submit relevant documents like shipping bill, E-BRC, Tax invoice, etc. to concerned DGFT RA.

Step- 7: DGFT RA may check the submitted documents and if the documents are clear; the DGFT RA may issue the transferable DFIA license within 20-25 days.

Step- 8:  Once the DFIA license is issued from DGFT RA, registration of the DFIA License should be done in customs for verification purposes.

Step- 9:  Applicant can use the DFIA license for import or sell the license in the market.

• 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.

• Our team experts, who can analyze the feasibility of the DFIA scheme for exports.
• We help our clients in documentation in avoiding the delay in the process.
• After receiving the required documents, we prepare the application and make the online application and submit required hardcopy in DGFT.
• We coordinate with DGFT and other concerned departments until the issuance of the transferable DFIA license.
• In domestic procurement, we assist our clients in getting required invalidations from the DGFT RA.
• Lastly, we assist them in the redemption of the DFIA license at DGFT.

• Notification on 31.03.2020:Extension of FTP 2015-20 till 31st March 2021:
  All DFIA Licenses expiring between 01.02.2020 to 31.07.2020 get automatic extension for 6 months.