Advance Licence for Free of Cost and Paid Material 4.6

In terms of paragraph 4.1.8 of the Policy, an exporter may apply for an Advance Licence for import of items mentioned in paragraph 4.1.3 of the Policy, some or all of which may also include items that are supplied free of cost.

In such cases, a specific endorsement shall be made on the exchange control copy of the Advance Licence disallowing remittances for the material being supplied free of cost. All inputs imported shall be utilised in the manufacturing of the product except the wastage.

The value addition in the case of such advance licences would be computed by adding the notional value of the free of cost material to both the CIF value of imports and FOB value of exports.