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Advance Release Order against Advance Licence for
Physical Exports /Deemed Exports /Annual Requirement/DFRC

 

DEFINITON
A An Advance Licene/Release Order is issued under Duty Exemption Scheme to allow import of inputs, which are Physically incorporated in the export product (making normal allowance for wastage). In addition fuel, Oil, energy,Catalyst etc which are consumed in the course of their use to obtain export product.
B Advance Licence can be issued for Physical Exports, Intermediate Supplies for
Exports and Deemed Exports and can be granted to a merchant-exporter or
manufacturer-exporter for the import of inputs required for the manufacture of goods
C An Advance Licence holder except Advance Licence for intermediate supply, holder of DFRC intending to source the inputs from indigenous sources/ canalising agencies/EOU/EPZ/SEZ/EHTP/STP units in lieu of direct import has the option to source them Against Advance Release Orders denominated in foreign exchange/ Indian rupees. In such a case the licence shall be invalidated for direct import and a permission in the form of ARO shall be issued which will entitle the supplier to the benefits of deemed export. The transferee of a Duty Free Replenishment Certificate shall also be eligible
for ARO facility.
 
HIGHLIGHT FOR ADVANCE RELEASE ORDER AGAINST
A Advance Licence can be issued for Physical Exports, Intermediate Supplies for
Exports and Deemed Exports and can be granted to a merchant-exporter or
manufacturer-exporter for the import of inputs required for the manufacture of goods
B Advance Licences for Physical export are exempted from Basic Customs Duty, Surcharge, Additional Customs Duty, Anti-Dumping Duty & Safeguard Duty
C Advance Licences for Intermediate Manufacturer are exempted from
Basic Customs Duty, Surcharge, Additional Customs Duty
and not from Anti-Dumping Duty and Safe-guard Duty
D For the Purpose of claiming deemed export benefits if any indigenous supplier shall produce a copy of ARO and documentary evidence substantiating the realization of proceeds from the holder of Advance Licence for Physical Exports/Deemed Exports/Annual Requirment, through normal Banking Channel .ARO issue against DFRC shall however be entitled only to benefit given in 10.3b of Policy whereas ARO for other categories shall be entitled to benefits given in Para 10.3b and 10.3c Of the Policy

10.3 b Supply of goods of Export Oriented Units(EOUs) or units located in           Export Processing Zones(EPZS) or Special Economic Zone(SEZs) or
          Software Technology Parks(STPs) or to Electronic Hardware           Technology Parks (EHTPs)

10.3 c Supply of capital goods to holders of licence under the Export           Promotion Capital Goods(EPCG) Scheme

 
FEATURES
A The Advance Release Order shall be produced in Original to above mentioned
indigenous producer for Supply of Goods
B This release order will be valid upto
C The material received by the holder of this release order shall be subject to the same condition as applicable to the licence issued under Duty Exemption Scheme against which this Advance Release Order has been issued
D Both Quantity and Value shall be limiting Factor
 
BACK TO BACK INLAND LETTER OF CREDIT
A An Advance Licence holder except Advance Licene for Intermediate Supply and holder of DFRC, may instead of applying for an Advance Release Order, avail of the Facility of Back to Back Inland Letter of Credit in accordance with the procedure specified in Handbook
B The exporter may alternatively avail the facility of a back to back inland letter of credit form the banks. An Advance Licence holder, except for an intermediate supply and DFRC holder, may approach a bank for opening an inland letter of credit (LC) in favour of an indigenous supplier
C Before opening the LC, the bank will ensure that the necessary BG/LUT has been executed by the Advance Licence holder and an endorsement to that effect has been made on the Licence. However execution of BG/LUT shall be required against DFRC. After opening the inland LC, the bank shall make the following endorsement on:
1 The Exchange Control Copy of the Advance Licence for Physical Exports/Deemed Exports/Annual Requirment/DFRC
2 The Cusrom Copy of the Advance Licence for Physical Exports/Deemed
Exports/Annual Requirment/DFRC
3 On the DEEC book(Part-I) for Advance Licence for Physical Exports/Deemed Exports/Annual Requirment/DFRC
4 The Value of this Advance Licene for Physical Exports/Deemed Exports/Annual Requirment/DFRC, stands reduced by a sum of Rs ____ being the value of the inland LC No____ opened today by the licence in favour of M/s____(name and address of the Indigenous supplier)
5 The Licence shall be invalidated by the bank form direct import only in respect of the full quantity and value of the item being sourced indigenously
6 The Original Letter of Credit (LC) may be retained by the bank for negotiation and only the non negotiable copy of the LC may be given to the indigenous supplier
7 The responsibility of the bank shall be confirmed to making the endorsement. The bank shall not be liable for any misrepresentations or false stament made by the licensee while requesting the bank to make the endorsement. The island LC opened by the bank in favour of the indigenouse supplier shall not be canceled for any reason what so ever
8 The non negotiable of inland LC together with the Photocopy of the Advance Licence along with DEEC duly carrying endorsements made by the bank shall be sufficient for the indigenous supplier to claim deemed exports benefits. LC issued against DFRC Shall , however be entitled only to benefit given in Para 10.3b of policy, whereas LC for other categories shall be entitled to benefit given in para 10.3 b and c of the policy
9 For the Purpose of claiming deemed export benefits if any indigenous supplier shall produce a copy of ARO and documentary evidence substantiating the realization of proceeds from the holder of Advance Licence for Physical Exports/Deemed Exports/Annual Requirment, through normal Banking Channel .ARO issue against DFRC shall however be entitled only to benefit given in 10.3b of Policy whereas
ARO for other categories shall be entitled to benefits given in Para 10.3b and 10.3c Of the Policy

10.3 b Supply of goods of Export Oriented Units(EOUs) or units located           in Export Processing Zones(EPZS) or Special Economic           Zone(SEZs) or Software Technology Parks(STPs) or to Electronic           Hardware Technology Parks (EHTPs)

10.3 c Supply of capital goods to holders of licence under the Export           Promotion Capital Goods(EPCG) Scheme

 

Detail Requirements :

Please give following Details/Documents to enable us to process your application.

01 NAME OF COMPANY/FIRM
02

ADDRESS OF THE CO./FIRM
(REGISTERED OFFICE IN CASE OF LIMITED COMPANIES AND HEAD OFFICE FOR OTHERS)

 

  TELEPHONE Nos.
  FAX Nos.
  E-MAIL ADDRESS
     
02-A NAME AND ADDRESS OF ALL THE BRACHES/DIVISIONS/UNITS/FACTORIES LOCATED IN INDIA.
  TELEPHONE Nos.
  FAX Nos.
     
03 NO. & DT. OF SSI REGISTRATION/:
INDUSTRIAL LICENCE/IEM/
OTHERS (SPECIFY)
  ISSUING AUTHORITY
     
04 Items to be supplied by Indigenous Producers
 
SR Description of Goods Quantity in Fig Quantity in Word Value in Fig and Words
         
         
 

If you have any queries, please feel free to call or fax us.

Thanking You,

Yours faithfully,
Impex Solution


Bharat Parekh
Partner