Advance License norms refer to the specific conditions and requirements that businesses must adhere to when obtaining and utilizing an Advance License issued by the Directorate General of Foreign Trade (DGFT) in India. These norms are essential for ensuring that the benefits of the Advance License scheme are used for their intended purpose of promoting exports and facilitating imports of specified goods. The exact norms may vary depending on the type of Advance License, the goods involved, and the export-import policies in place at the time of application. However, here are some common norms associated with Advance Licenses:

1. Export Obligation: Advance License holders are typically required to fulfill an export obligation. This obligation entails exporting goods of a certain value within a specified time frame. The specific value and time frame can vary based on the type of license and the goods covered.
2. Value Addition: Some Advance Licenses may stipulate a minimum value addition requirement. This means that businesses are required to add a certain percentage of value to the imported materials through manufacturing or processing activities before exporting the final products.
3. Use of Imported Goods: The imported materials covered by the Advance License must be used exclusively for the production of export goods. Businesses are not allowed to divert these materials for any other purpose, including domestic sales.
4. Record Keeping: License holders are required to maintain accurate records of imports, production, and exports. These records are subject to inspection by DGFT officials and must be kept for a specified period.
5. Reporting Obligations: Advance License holders may have reporting obligations to DGFT or customs authorities. They must report on their progress in meeting the export obligation and other requirements as specified.
6. Prohibited Items: Some goods, such as certain chemicals, hazardous materials, or items of strategic importance, may be prohibited from being imported under an Advance License.
7. No Transfer of License: Advance Licenses are generally non-transferable. They are issued to the specific entity that applied for them and cannot be transferred to another party without prior approval from DGFT.
8. Completion of Export Obligation: License holders must ensure that they complete the export obligation within the specified time frame. Failure to do so can result in penalties or loss of benefits.
9. Compliance with Export-Import Policies: Advance License holders must comply with all relevant export-import policies, including any changes or updates that may occur during the license’s validity period.
10. Audit and Inspection: DGFT may conduct audits or inspections to verify compliance with the license norms. It is essential for license holders to cooperate fully during such audits.
11. Redemption of Export Obligation: Once the export obligation is fulfilled, the license holder may apply for redemption of the license, which involves submitting the necessary documentation to DGFT for verification.

It’s crucial for businesses applying for and utilizing Advance Licenses to carefully review the specific norms and conditions associated with their license to ensure compliance. Failure to adhere to these norms can result in penalties, loss of benefits, or other adverse consequences. Additionally, consult with us so that we can provide valuable guidance on navigating the complexities of the Advance License scheme and meeting its requirements.