DGFT Notification No. 69/2023: New Provisions for Import of Inputs Under Advance Authorisation Without Mandatory QCOs

The Directorate General of Foreign Trade (DGFT) has introduced an important update through Notification No. 69/2023, facilitating the import of inputs under Advance Authorisation (AA) and by Export Oriented Units (EOUs), even when such inputs are subject to mandatory Quality Control Orders (QCOs). This amendment is a part of the Foreign Trade Policy (FTP) 2023 and aims to ensure smooth manufacturing and export operations for exporters.

Key Highlights of the Notification

Insertion of Para 4.18 (A): Importability of Items Under Advance Authorisation Without Mandatory QCOs

The import of inputs under Advance Authorisation, without complying with the mandatory QCOs, is allowed under the following conditions:

1. Imports must be with pre-import condition and strictly used in the manufacture of the export product. The processed/exported product must be under the same authorisation.
2. Exemptions from QCOs must be explicitly endorsed in the Advance Authorisation. Any imports without such endorsement will need to comply with QCOs.
3. Transfer to DTA is prohibited for any unutilised inputs or products made from such inputs. These must either be destroyed or re-exported.
4. Unutilised Imports Regularisation:
   • Must be destroyed in the presence of GST/Customs officials or re-exported.
   • Duties/taxes with 10% CIF value penalty must be paid for exempted inputs if not utilised.
5. QCO exemption is only for physical exports, not deemed exports.
6. Clubbed authorisations under para 4.36 are not allowed.
7. EO period and other procedural conditions will follow existing FTP and HBP rules.
8. The exemption is also subject to para 2.03 (c) of FTP.

Updates to Other FTP Sections

Para 4.24 (FTP 2023) - Additional Sub-para:

• Import of inputs without compliance to QCOs under the DFIA scheme is not allowed.

Para 6.07 (FTP 2023) - Inclusion for EOUs:

• EOUs can also import inputs without complying with BIS-mandated QCOs for export production.
• Requires declaration at import time and submission to Development Commissioner.
• Only applicable to physical exports; not permitted for deemed exports or DTA clearance.

Para 2.03 (e) (FTP 2023):

• Lists Ministries/Departments whose QCO-related notifications are exempted for export manufacturing.
• This list is provided in Appendix-2Y of FTP 2023.

Impact of the Notification

This notification is a significant relief for exporters using Advance Authorisation and EOU schemes. It simplifies procedures by allowing the import of certain inputs without mandatory QCO compliance, provided strict end-use and export obligations are fulfilled.
It:

• Ensures greater flexibility for exporters.
• Prevents supply chain disruptions due to QCOs.
• Encourages ease of doing business and supports India’s export ecosystem.

Conclusion

DGFT’s proactive approach through Notification No. 69/2023 underlines the government’s support towards exporters by aligning trade facilitation with quality compliance. Exporters should ensure compliance with the detailed provisions of this notification and consult the Handbook of Procedures and relevant FTP appendices for clarity. For expert assistance in Advance Authorisation or BIS QCO compliance, feel free to reach Aleph India.