Let's help you!

DFIA Scheme

An Overview of DFIA Scheme

Duty exemption schemes were implemented in the Foreign Trade Policy to allow the duty-free import of raw materials or inputs essential for the creation of export products, making life easier for exporters.

  • The DFIA scheme replaced the Duty-Free Replenishment (DFRC) programme on May 1, 2006, and it is similar to the Advance Authorisation Scheme with several changes.
  • The DFIA licence provides duty-free import of inputs or raw materials, oil, fuel, catalyst, and energy resources, all of which are required to produce the export products.
  • DFIA shall only be issued for products for which standard Input and Output Norms (SION) have been announced; thus, import entitlement must be confined to the quantity specified in SION.

DFIA License is transferable; license or inputs imported can be transferred or sold under DFIA Scheme.

Duties are exempted under the DFIA Scheme.

  • The Duty-Free Import Authorisation scheme exempts just the payment of basic customs duty (BCD).
  • The DFIA system does not exempt IGST or compensating Cess.

Eligibility under DFIA Scheme.

  • For products where standard Input-Output Norms have previously been notified, the DFIA licence will be awarded after export.
  • Manufacturer and merchant exporters are both able to apply for a DFIA licence. The name and address of the supporting manufacturer must be included in all export documents, such as shipping bills and bills of export/tax invoices, as defined by the GST laws.
  • Before beginning to export under duty-free import authorisation, the applicant must submit an application to the relevant DGFT RA.
  • A duty-free import permission will not be provided for a pre-import conditional import. DFIA licences will also not be provided for genuine user conditions or products listed in Appendix-4J, such as spices, tea, coconut oil, precious metals/Gold/Silver/Platinum, and so on.

Minimum Value Addition under the Scheme of Duty-Free Import Authorization

Value Addition shall be:

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.

DFIA Scheme Procedure - Duty Free Import Authorisation Scheme Steps to Follow

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

Step 1: The applicant must determine whether the exported item is eligible for DFIA in SION.
Step 2: If the export item meets SION criteria, the applicant must submit an online application to the DGFT site and obtain a File number.
Step 3: Export must be completed within 12 months of the date the file number was issued.
Step 4: The applicant must include the produced file number on all export documents such as shipping bills, tax invoices, bills of export, and so on.
Step 5: Once the export obligation has been fulfilled, the applicant must apply for a transferable DFIA licence.
Step 6: The applicant must submit appropriate papers to the relevant DGFT RA, such as a shipping bill, E-BRC, tax invoice, and so on. Step 7: The DGFT RA will review the provided documentation and, if they are clear, will issue the transferable DFIA licence within 20-25 days.
Step 8: Once the DFIA licence has been given by the DGFT RA, it must be registered in customs for verification purposes.
Step 9: The applicant can utilise the DFIA licence to import or sell it in the market.

Validity & Transferability of DFIA

  • Transferable duty-free import permission is valid for 12 months from the date of the licence issued by the DGFT RA. The DGFT RA would not allow for revalidation.
  • Each Standard Input Output Norms (SION) will require a separate DFIA application.
  • A separate application must be made to the RA of DGFT under DFIA for EDI and non-EDI ports.

How we can assist you for DFIA scheme?

  • We are a group of DGFT experts who can assess the viability of the DFIA export scheme.
  • We provide our clients with documentation to avoid procedure delays.
  • We create the application, make the online application, and submit the relevant hardcopy in DGFT after obtaining the required papers.
  • We collaborate with the DGFT and other relevant departments until the transferable DFIA licence is issued.
  • In domestic procurement, we help our clients obtain the necessary invalidations from the DGFT RA.
  • Finally, we help them redeem their DFIA licence at DGFT.
Frequently Asked Questions

Frequently Asked Questions

The DGFT issues a DFIA licence under the Duty Free Import Authorisation system, which exempts basic customs duty on the import of inputs required to produce the export products. It is also granted for export products for which SION has been notified by DGFT.

The DFIA plan provides duty-free importation of inputs such as fuel, oil, catalysts, and energy sources in order to produce export products.

The applicant can refer to Public Notice. 82/2015-20/ dated 29.03.2019 to check the TMA Scheme benefit. Or can simply share the documents with us, and our team would get back to you with an excel report of eligible benefit shipping bill wise.

DFIA License AA License
Duty Free Import Authorization Advance Authorization
It is issued for inputs from exemption of only basic customs duty It is issued for inputs at zero duty
Minimum Value addition is 20% Minimum Value addition is 15%
It is granted after completion of export obligation. Issued before export obligation completion
The Validity period is 12 months from date of issue Validity is 18 months from date of issue of license
DFIA is transferable and can be sold. AA is subject to actual user condition & is non-transferable.

The applicant must submit an online application along with supporting documentation. We have an expert team that can assist you in filing an online application and obtaining a transferable DFIA licence from DGFT RA.

Yes, under DFIA licence and an ARO (Advance Release Order)/Invalidation Letter, inputs can be acquired locally.

Export obligations must be met by the exporter using a DFIA licence. The DFIA programme imposes export obligations in terms of both value addition and quantity. The licence mentions all of these details.

Transferability of a DFIA licence refers to the transfer of a licence or imported inputs other than fuel following the completion of the export obligation. A request for transferability must be made to the appropriate RA of the DGFT.

In shipping bills, applicants must present a declaration for technical qualities, quality, and specifications. All of the above details are mentioned in the authorization by the DGFT RA. Alloy steel, stainless steel, copper alloy, solvent, perfume, chemicals, and other sensitive materials are examples.

Under DFIA scheme government fee is 0.1% of the Duty saved value with a minimum fee of Rs. 500/-

It takes 20 – 25 working days to get DFIA License issued from DGFT.

DFIA licences issued by the DGFT under the DFIA programme must be registered with customs for verification purposes. DFIA licences may be issued for either a seaport or an airport. Following registration, any imports against such authorization must be made through that port exclusively.

Yes, It is mandatory to register DFIA license at Customs.

Yes, DFIA license is transferable in nature.

Yes, we can sell the license as it is transferable in nature.

Yes, We do help in selling of DFIA license and follow the transparent procedure of sale.

DFIA license is valid for 12 months from date of issue of license.