Advance Authorisation lets you import inputs without paying customs duty, provided you meet an export obligation; duty drawback refunds duty you have already paid, after the export. Advance Authorisation usually saves more and improves cash flow for manufacturers with high imported content and steady orders. Drawback is simpler and carries no export obligation. You cannot claim drawback on inputs imported duty-free.
How do they compare?
The trade-off is upfront savings against obligations and paperwork.
| Advance Authorisation | Duty drawback | |
|---|---|---|
| When you benefit | At import, duty not paid | After export, duty refunded |
| Obligation | Export obligation within a fixed period | None beyond completing the export |
| Paperwork | Application, norms, consumption records, closure | Low for AIR; higher for brand rate |
| Cash flow | Better, no duty blocked | Duty blocked until refund |
| Risk | Duty plus interest if obligation missed | Low |
Who should choose which?
Choose Advance Authorisation if imported inputs are a large share of cost and export orders are predictable. Choose drawback if imports are small, irregular, or you cannot commit to an export obligation.
Services that help
Frequently asked questions
Can I use both?
On different inputs or shipments, sometimes yes, but never drawback on inputs that were imported duty-free under the authorisation.
Related reading
Sources and official portals
Import Export Advisor is a private consultancy, not a government body. Scheme rules and fees change; this page reflects information checked on the date above. Confirm current requirements on the official portal before filing.