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DGFT Simplifies Composition Fee for Export Obligation Extension Under Advance Authorization Scheme

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Last Updated: January 18, 2023, 18:12 IST

India's exports in December 2022 dipped by 12.2 per cent to $34.48 billion.

India’s exports in December 2022 dipped by 12.2 per cent to $34.48 billion.

The revised composition fee formula is more straightforward and easier to calculate

The Directorate General of Foreign Trade (DGFT), under the commerce ministry, has notified the amended rules for the calculation of the composition fee for extending the export obligation under the Advance Authorization Scheme.

“The simplification of calculations for the composition fee helps in automation and faster service delivery by making the process more efficient and easier to understand. The previous formula for the composition fee was convoluted and difficult to understand, which made the process more tedious and strenuous for exporters. However, the revised composition fee formula, which is based on a specific rate for different levels of the ‘CIF value of Authorisation’, is more straightforward and easier to calculate,” the DGFT said in a statement on Wednesday.

It added that this will help automate the entire export obligation extension process with minimal human intervention, further eliminating the risk of errors and misconceptions. Automation of the process will reduce the need for manual calculations and paperwork, which will ultimately lead to faster service delivery. This will be beneficial to exporters as it will reduce the time and effort required to complete the export obligation extension process.

India’s exports in December 2022 dipped by 12.2 per cent to $34.48 billion as against $39.27 billion in the same month last year, according to the data released by the commerce ministry on Monday.

Imports in December 2022 also declined to $58.24 billion as against $60.33 billion in the same month last year. India’s merchandise trade deficit fell further to $23.76 billion in December, after declining to a seven-month low of $23.89 billion in November.

“Additionally, automation will also reduce the risk of errors and misconceptions, which will further improve the efficiency of the process. The process of automation is being taken up under the IT-revamp project of DGFT and shall be notified separately. Simplification of calculations also helps in the ‘Ease of Doing Business’ objective by reducing the complexity and making the process more straightforward for exporters,” according to the DGFT notification.

It added that by simplifying the calculations for composition fees, the DGFT is working towards this objective by making the process more efficient and easier to understand for exporters. This will ultimately lead to trade facilitation and ease of doing business.

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