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The ministry of commerce will soon consider the recommendation to treat the extension criteria of advance authorisation without policy circular no 9 and will also allow the local Directorate General of Foreign Trade (DGFT) to permit the extension of validity of such advance authorisation. This may reduce the time taken to get the approval from DGFT, Delhi.
The joint secretary of department of commerce at the recent Committee of Administration (CoA) meeting of Pharmaceuticals Export Promotion Council (Pharmexcil) has assured to consider the matter soon and will also grant permission to local DGFT for the extension of validity of advance authorisation.
The pharmaceutical exporters have been urging the DGFT to treat extension criteria of advance authorisation without policy circular no 9 as it forces the exporters to completely use the raw material and other inputs imported under advance authorisation for manufacture and export of finished products. The finished products must be exported within 12 months of first import of raw material.
If these criteria are not fulfilled, then the inputs so imported, should be re-exported or destroyed. The other provision is that such imported inputs can be used for the manufacture of other products for export and should be exported within the validity of authorisation, which is 12 months.
At present, the extension of such authorisation is subject to the clearance from DGFT, Delhi and it takes a long time in getting approval from them. The step to grant permission to local DGFT for the extension will reduce the time of the exporters and they will be able to utilise the raw material for other products instead of destroying or re-exporting them.
They have also suggested to increase the validity period of advance authorisation from 12 months to 18 months like normal other licensed and export obligation and period of validity should be 18 months from the date of import.
As per policy circular no 9, the raw material and other inputs imported under advance authorisation should be used 100 per cent for manufacturing and export of finished products and it is compulsory that such exports should be effected within 12 months from the date of first import or within the validity of authorisation, whichever is earlier.
The raw material imported under Policy Circular no 9 (PC9) licenses are required to be destroyed after payment of relevant duty along with interest in case the exporter fails to export the resultant product or to re-export the imported raw material to complete the export obligation. Such raw materials are not allowed to be used for domestic consumption in India.
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