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An advance licence is granted for the import of inputs without payment
of basic customs duty. Such licences shall be issued in accordance with
the policy and procedure in force on the date of issue of the licence
and shall be subject to the fulfillment of a time-bound export
obligation, and value addition as maybe specified. Advance licences
maybe either value based or quantity based.
As per the latest amendments to the EXIM Policy, the facility of Back
to Back Inland Letter of Credit has been introduced, to enable an
Advance Licence holder to source his inputs from domestic suppliers.
Value Based Advance LicenseUnder a value based advance
licence, any of the inputs specified in the licence maybe imported
within the total CIF value indicated for those inputs, except inputs
specified as sensitive items.
Under a value based advance licence, both the quantity and the FOB
value of the exports to be achieved shall be specified. It shall be
obligatory on the part of the licence holder to achieve both the
quantity and FOB value of the exports specified in the licence.
Amendments to the Advance License Scheme The Advance
License Scheme has been expanded and liberalized with the amendments
made to the EXIM Policy, announced on 31st March 1995.
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