Overview
SION stands for Standard Input-Output Norms. The Advance Authorization under SION is a type of Advance Authorization Scheme for export-promotion which is administered by the Directorate General of Foreign Trade (DGFT) and is prescribed under the Foreign Trade Policy (FTP) and Handbook of Procedures (HBP).
Under the SION-based route, an exporter obtains an Advance Authorisation based on an already notified SION applicable to the relevant export product. SION indicates the quantity of specified inputs permitted for manufacture of a specified quantity of export product, including applicable wastage/normative consumption parameters.
The first step for any exporter applying for an Advance Authorization is to search and identify an existing SION and, if applicable, use it for applying for the Advance Authorization in accordance with the prescribed input-output norms.
The main objective of this scheme is to enable an Indian exporter to obtain inputs required for manufacture of export goods without bearing the customs-duty incidence on such inputs, subject to the conditions of the Advance Authorisation and the applicable Customs exemption notifications.
The scheme therefore ensures that customs duties on inputs do not become embedded in the cost of products intended for export, but the exporter cannot simply import whatever quantity of material it considers necessary. The consumption is controlled by the SION through the limits on quantity.
A SION-based Advance Authorization identifies:
- The export product
- Its description/specification
- The standard quantity of export product
- The permitted inputs
- The quantity of each input
- Applicable wastage/normative consumption
- Special conditions, wherever prescribed
Key facts
- Scheme type: SION-based Advance Authorization is a route under the Advance Authorization Scheme notified under Chapter 4 of the Foreign Trade Policy (FTP), 2023 relating to Duty Exemption / Remission Schemes.
- Administering authority: the scheme is administered by the Directorate General of Foreign Trade (DGFT) through the jurisdictional Regional Authority (RA). SIONs are notified, reviewed and revised by the DGFT Norms Committee from time to time.
- Where are the norms published: SIONs are revised/amended from time to time by DGFT. An exporter should verify the latest applicable SION and any subsequent amendments on the DGFT portal before applying for Advance Authorization.
- At-a-glance benefit: where an applicable SION is already notified for the export product, the exporter does not have to obtain a fresh norms fixation from the Norms Committee. The exporter identifies the applicable SION and applies for Advance Authorization for the quantities in compliance with its conditions. Subject to the applicable provisions, the same notified SION can be used for successive Advance Authorizations, with no requirement to obtain fresh ad-hoc norms approval.
- Pre-condition: the route is available only where DGFT has notified an applicable SION covering the relevant export product and the inputs proposed to be used. If no suitable SION exists, the exporter must consider another applicable norm route, such as ad-hoc norms, self-declared norms or self-ratification, subject to the eligibility and conditions prescribed for that route.
- Import validity and Export Obligation Period: an Advance Authorization based on SION is subject to the general validity and EO provisions applicable to Advance Authorizations under the FTP and HBP. The normal validity period for import is 12 months from the date of issue, subject to applicable revalidation provisions. The Export Obligation Period (EOP) is normally 18 months from the date of issue, subject to the specific provisions and exceptions prescribed under HBP.
Who can apply, and for what
Who can apply?
- Manufacturer Exporter: an exporter manufacturing the resultant export product himself may apply.
- Merchant Exporter: a merchant exporter may also apply, tied to a supporting manufacturer in accordance with the prescribed requirements.
The FTP allows Advance Authorisation for:
- Physical exports
- Exports to SEZs
- Deemed exports
- Supply of specified "stores" on board foreign-going vessels or aircraft, where a specific SION exists for the item supplied
What benefits does SION-based Advance Authorization provide?
No separate norms fixation
Where the product is covered by an existing SION, the exporter does not normally need to approach the Norms Committee for prior fixation of norms.
Duty-free import of eligible inputs
Permits import of inputs specified under the applicable SION without payment of applicable customs duties, subject to the scheme conditions.
Predictable input entitlement
The applicable SION specifies the permissible quantity of each covered input against the prescribed quantity of the export product, so the exporter can determine the approximate input entitlement before applying.
Faster and simpler processing
Since the norms are already established, the application can generally proceed without the additional process involved in fixation of ad-hoc norms.
Repeat use
An exporter can apply for successive Advance Authorizations under the same applicable SION, subject to fulfilling the applicable conditions for each Authorization.
Reduced compliance uncertainty
The exporter can plan procurement and exports based on an established DGFT input-output norm rather than having to establish the consumption norm separately for each export product.
Export-linked duty saving
The scheme can reduce the landed cost of input used in the manufacture of export products, thereby improving export cost competitiveness.
Indigenous procurement facility, if required
A SION-based Advance Authorization is not limited to imports. Where permitted under the Advance Authorization provisions, the holder may also procure eligible inputs indigenously against the Authorization instead of importing them.
Application process
From identifying the export product to DGFT issuing the Advance Authorisation, here's how a SION-based application comes together.
Identify the export product
Pin down the exact export product, its technical specifications, ITC(HS) classification, manufacturing process, and the intended quantity/value of exports.
Identify the correct SION
Search the DGFT SION database to identify the applicable SION and check the following:
- SION number
- Export product description
- ITC(HS) classification
- Input description
- Input quantity
- Wastage
- General notes
- Special conditions
Verify the SION against actual manufacturing
- Manufacturing requirement
- Actual raw material
- Wastage
- Input specification
- Alternative sourcing of inputs (whether domestically available)
Prepare ANF-4A with required documents
The applicant should file the online ANF-4A application to the jurisdictional DGFT Regional Authority, selecting the applicable SION entry and its prescribed input-output norms for the export product.
The application should contain the required details of the export product, proposed inputs, quantities as per the SION, export obligation and other particulars prescribed under the Advance Authorisation procedure. The prescribed supporting documents should also be uploaded/submitted, as applicable.
DGFT processing and issue of the Advance Authorisation
The DGFT Regional Authority processes the ANF-4A application and verifies the applicant's eligibility, the applicable SION entry, export product description, input requirements and other prescribed conditions.
When the application is in order, the Regional Authority issues the Advance Authorisation specifying the permitted inputs and quantities in accordance with the relevant SION. The Authorisation enables duty-free import of eligible inputs, subject to the applicable conditions and fulfilment of the prescribed Export Obligation (EO).
Illustrative example for Advance Authorisation based on SION
A Coimbatore-based manufacturer of engineering goods exports precision-machined components. The product manufactured and exported by the company falls within an existing Standard Input Output Norm (SION) notified by DGFT for the relevant category of engineering goods. The applicable SION specifies the permissible quantity of inputs, such as raw steel and alloy materials, along with the prescribed wastage allowance, for a specified quantity or unit of exported product.
Since the product, inputs and manufacturing process conform to the requirements of the applicable SION, the exporter can apply for an Advance Authorisation under the existing SION by filing ANF-4A and quoting the relevant SION serial number. The exporter does not need to seek a separate fixation of norms by the Norms Committee since an existing SION is applicable.
The Regional Authority processes the Advance Authorisation with reference to the applicable notified SION and the quantities permissible under that norm. Once the Authorisation is issued, the exporter can import the permitted inputs subject to the conditions of the scheme and use them in the manufacture of the resultant export product. The exporter fulfils the prescribed Export Obligation and applies for the Export Obligation Discharge Certificate (EODC) with the prescribed supporting documents.
A key advantage of the SION route is that the exporter can subsequently apply for another Advance Authorisation for the same product by referring to the existing applicable SION.
Advance Authorisation SION, explained
A quick video walkthrough of how SION-based Advance Authorisation works, from identifying the applicable norm through to filing and EODC. Tap play to watch here, or open it directly on YouTube.
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FAQs
A SION under Advance Authorization generally specifies the quantity of permitted inputs that may be imported duty-free against a specified quantity of export product, including applicable wastage or other conditions. It is available on the DGFT portal.
The exporter should first identify the correct export product description and ITC(HS) classification, and then check for the applicable SION on the DGFT Portal to match the export product as well as the required inputs.
The absence of a SION should not be treated as ineligibility for Advance Authorization. It means the exporter needs to examine the alternative norms route applicable to the specific case — such as ad-hoc norms, where norms are fixed by the Norms Committee, or self-declaration/self-ratification, where the applicable conditions are satisfied.
No. It does not eliminate the possibility of demand arising from non-compliance with the SION-based Advance Authorization conditions.
Yes. Where the export product and inputs satisfy the requirements of the same SION, the exporter may apply for separate Advance Authorizations based on that SION, subject to the applicable policy and procedural conditions.
A subsequent amendment to a SION should not automatically be assumed to retrospectively rewrite an already issued Authorization. Exporters should retain the SION and relevant DGFT notification/public notice applicable on the date of issuance of the Authorization.
It is not restricted to manufacturer exporters. DGFT's Advance Authorisation framework permits a manufacturer exporter or a merchant exporter tied to a supporting manufacturer, subject to the applicable conditions, to avail the scheme.
No, not merely because the Authorization is based on SION. Where the Advance Authorization is obtained strictly based on an existing SION, the exporter should examine the documents prescribed for the ordinary ANF-4A application and the particular Authorization, rather than assuming a Chartered Accountant Certificate is required simply because SION is being used.
The Advance Authorization scheme identifies a general framework of 12 months' validity for imports and 18 months for the Export Obligation, subject to the extensions permitted under the applicable procedures.
Yes. DGFT can create, modify, amend or otherwise revise SION entries from time to time based on industry requirements, technical considerations, representations and recommendations of the relevant Norms Committees.
