what is the purpose of Value addition, FEMA

[Nilesh Kalsariya]

Dear Sir,

I want to know the term VALUE ADDITION in under Advance Authorization,

what is the purpose of Valued Addition,

how can calculate value addition,

Please solve my query,

Thanks

Kalsariya Nilesh

Posts / Replies

[CS SANJAY MALHOTRA]

Dear Mr. Nilesh,

Minimum Value Addition of 15% is required against the Advance Authorization. The objective is to ensure the earnings of Foreign Exchange. If your Import CIF Value is ₹ 100 as per SION norms, then the Export FOB Value should be minimum ₹ 115/-

In case of shortfall in the Value addition, 1% of the Value shortfall is to be paid as composition fees to the office of DGFT at the time of redemption of Advance Authorization.

[Mahir S]

Yes Sir, the view expressed above is legal and correct.

[Mahir S]

Further to add for the sake of clarity and understanding of the subject regarding calculating value addition; you can use the following formula :-

Minimum value addition of 15%, except for items specified in Appendix-11B of HBP v1 (copper cathode and copper wire roads) and for items in Gems and Jewellery sector.

Value Addition

VA = {(A-B)/B} x 100

– A = FOB value of exports realised.

– B = CIF value of inputs covered by authorisation , plus value of any other input used on which benefit of DBK is claimed or intended to be claimed.

[CS SANJAY MALHOTRA]

Thanks for addition Mr. Mahir.

[Nilesh Kalsariya]

Dear Sir,

Thanks for your reply,

I am satisfied by answer ,

I want to know about status certificate/and digital signature for the purpose of online application for advance license and epcg license.

Best Regards,

[Nilesh Kalsariya]

Dear Sir,

I request you please specify,

Why require status certificate and digital signature in DGFT,

as per my knowledge Status certificate essential for the realization of Export,

Am i right?

Best regards.

[CS SANJAY MALHOTRA]

Dear Mr. Nilesh,

Status Certificate (Export House) is required for exemption from submission of Bank Guarantee in case of Import under EPCG & Advance Licence.

Digital Signature is required for submission of Online Application for EPCG / Advance Licence at DGFT site.

[Mahir S]

Thanks Sanjay ji

[Nilesh Kalsariya]

Thank you very much Mr.sanjay ji

if we have available IEC ,Central tax registration certificate , RCMC ,Excise registration.

We want apply online advance license or Epcg then which document require for application of license in DGFT.

and I call to Excise officer to inspection of goods at factory, at that time which document is essential to Excise officer.

Thanks

Kalsariya Nilesh

[Nilesh Kalsariya]

if we have available IEC ,Central tax registration certificate , RCMC ,Excise registration.

We want apply online advance license or Epcg then which document require for application of license in DGFT.

and I call to Excise officer to inspection of goods at factory, at that time which document is essential to Excise officer.

Thanks

Kalsariya Nilesh

[CS SANJAY MALHOTRA]

Dear Mr. Nilesh,

for seeking Advance Authorisation, online application has to be made to jurisdictional DGFT in form ANF-4A. Digital Signature is required for log into DGFT system. Do check SION Norms for your product from DGFT website. Do attach the RCMC Copy alongwith the application details duly filled in besides online payment of Application fee.

If desired, you may submit copy of ANF-4A (hard copy) with your DGFT office, who will accordingly issue you an Advance Authorisation.

[Nilesh Kalsariya]

Dear Mr.sanjay ji

Thank you very much for solve my query,

Best Regards,

Kalsariya Nilesh

[Nilesh Kalsariya]

Dear Mr.Sanjay ji

I want to see every update in DGFT scheme and FTP then which site is better to see update and change in policy and scheme like advance license validity is decided 18 months instead of 24 months.

what is the period of Export obligation start to end under Advance authorization,

what is the Period fo Export obligation start to end period under EPCG License

Which time below process of application start or how can do

Application and closure of EPCG License
Application for Invalidation

Thanks

Kalsariya Nilesh

[CS SANJAY MALHOTRA]

Dear Mr. Nilesh,

You can log in to dgft.gov.in for any updates in FTP matters.

EO period against Advance Authorization is 18 months. First extension of 6 months is allowed after EO period subject to declaration as to availability of raw Material in stock. 2nd Extension of 6 months is given provided the EO has been fulfilled to the extent of 50% both in Qty and FOB Value.

EO period against EPCG is 6 years. If 75% of the EO is completed in less than half time then balance 25% is waived off.

In case of domestic procurement, EO is 75% of the Normal E.O. whereas period remains same.

[Nilesh Kalsariya]

Dear Sir,

Have a nice day,

Please specify Documents List of Pre-shipment and post-shipment for Expot - Import,

What is the meaning of Pre Export and Post Export?

Best Regards,

Kalsariya Nilesh

[Nilesh Kalsariya]

Dear Sir,

How can we offer our good against ARE-1/CT as seller ?

please solve problem, how can we take are-1 and ct license for offer to buyer ?

thanks

Kalsariya Nilesh