Siegmar Messerli

The Advance Authorisation Scheme (AA) is a duty exemption scheme for exporters offered by the Indian government. It is provided through the Directorate General of Foreign Trade (DGFT) and incentivizes the import of required raw materials and additives that are physically incorporated into a product that is bound for exports. There can be fuel, oil, power, or catalysts consumed in the production of the export items. The Advance Authorisation Scheme (AA) makes the import of such inputs duty-free. The scheme also allows normal allowance for wastage of these inputs. Notification about the products to be included or excluded from the scope of AA is released as and when required by the DGFT in the form of public notices.

Although both EOUs and SEZs, were initiated to boost exports, there are differences between the two. An EOU can be set up anywhere in the country, provided it meets the scheme’s criteria. On the other hand, an SEZ is a specially demarcated enclave that is deemed to be outside the Customs jurisdiction and therefore, a foreign territory. Thus, any sale made from within an SEZ to DTA is considered export while any sale made by an EOU to DTA is regarded as deemed exports. Sale from SEZs to DTAs are more common, compared to sales from EOUs to DTAs. Being a clearly demarcated area, there is substantial control over the physical movement of goods to and from SEZs, but the same cannot be said about EOUs. In terms of taxability, an SEZ based establishment is not required to pay tax, while an EOU has to pay tax which it can claim as a refund later.

It's the carrier's responsibility to file the IGM before the cargo reaches the destination port. The company responsible for handling the transport needs to fill in the necessary details in this document and submit it to the customs department. Even though the carrier files the IGM, the exporter must also know the procedure correctly. That's why the carrier must discuss the associated details about the goods with the exporter before transporting them. Improper filing of the IGM can result in the customs department halting the transportation of goods, which can be detrimental to the entire shipping process.

Certificate of conformity is issued to legally state that your product has been manufactured and is in conformance with respect to the requirements from certain standards or specifications specified in the market’s regulation. Generally, mandatory elements that should be listed in the CoC minimally are:

• Product Identification with the product description covered in the CoC and specification to the associated purchase order numbers.
• Manufacturer/ importer’s identification such as the legal name, address and contact number.
• List of all safety regulations/standards that the product must pass.
• List of certificates awarded to manufacturer that the product has been tested and is compliant.
• The date and place where the product was manufactured.
• Date and place when the product was tested for compliance with the product safety rules cited.
• Identification of any 3rd party laboratory/certification agency with an indication of who did the test or issued the certificates.

Export credit insurance (ECI) protects an exporter of products and services against the risk of non-payment by a foreign buyer. In other words, ECI significantly reduces the payment risks associated with doing business internationally by giving the exporter conditional assurance that payment will be made if the foreign buyer is unable to pay. Simply put, exporters can protect their foreign receivables against a variety of risks that could result in non-payment by foreign buyers. ECI generally covers commercial risks (such as insolvency of the buyer, bankruptcy, or protracted defaults/slow payment) and certain political risks (such as war, terrorism, riots, and revolution) that could result in non-payment. ECI also covers currency inconvertibility, expropriation, and changes in import or export regulations. ECI is offered either on a single-buyer basis or on a portfolio multi-buyer basis for short-term (up to one year) and medium-term (one to five years) repayment periods.