DGFT simplifies Composition Fee for Export Obligation Extension under Advance Authorization Scheme

The Directorate General of Foreign Trade (DGFT) has notified the amended rules for calculation of Composition Fee for extending Export Obligation under Advance Authorization Scheme by amending Para 4.42 of Handbook of Procedures (2015-20) vide Public Notice No.52/2015-20 dated 18th January, 2023.

This move is to boost trade facilitation and ease of doing business.

The simplification of Composition Fee calculations aids in automation and faster service delivery by making the process more efficient and understandable. The previous Composition Fee formula was complicated and difficult to understand, making the process more time-consuming and difficult for exporters. The revised Composition Fee formula, which is based on a specific rate for different levels of the ‘CIF value of Authorisation,’ is simpler and easier to calculate.

This will assist in automating the entire Export Obligation extension process with minimal human intervention, reducing the risk of errors and misunderstandings.

Automation of the process will eliminate the need for manual calculations and paperwork, resulting in faster service delivery. Exporters will benefit from this because it will reduce the time and effort required to complete the Export Obligation Extension process.

Furthermore, automation will reduce the risk of errors and misunderstandings, increasing the process’s efficiency. The automation process is being undertaken as part of the DGFT’s IT-revamp project and will be announced separately. Calculation simplification also contributes to the “Ease of Doing Business” goal by reducing complexity and making the process easier for exporters.

By simplifying the calculations for Composition Fee, 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.