Paragraphs 4 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Paragraph 4.04 limits the Advance Authorisation for spices to processing such as crushing, grinding, sterilisation and the manufacture of oils or oleoresins. Paragraph 4.04A creates a Special Advance Authorisation Scheme for fabric used in articles of apparel and clothing accessories. Paragraph 4.45 of the Handbook says which Handbook paragraphs apply to that scheme.
This article is based on the chapter-wise text of the Foreign Trade Policy, 2023 published on the DGFT website, as consulted on 2 October 2026; the copy carries no "updated up to" date. The procedure is taken from Chapter 4 of the Handbook of Procedures, 2023 as published on the DGFT website (file of July 2026), consulted on 2 October 2026. Later Notifications and Public Notices should be checked. Exporters in these sectors apply for benefits through a council certificate; see our RCMC registration service.
Import of spices covered under Chapter 9 of ITC(HS) without payment of duty is permitted only for processing such as crushing, grinding, sterilisation or the manufacture of oils or oleoresins, and not for simply cleaning, grading or re-packing (paragraph 4.04). The Special Advance Authorisation covers fabric, including interlining, only for export of goods of Chapters 61 and 62 of ITC(HS), with norms to be fixed within 90 days on self declaration and 22% of FOB value for other inputs on which drawback is claimed (paragraph 4.04A).
Paragraph 4.04: Advance Authorisation for spices
Import without payment of duty of spices covered under Chapter 9 of ITC(HS) is permitted only for activities like crushing, grinding, sterilisation or manufacture of oils or oleoresins. The authorisation is not available for simply cleaning, grading, re-packing and similar operations. The test is the activity: a firm that only cleans and repacks imported spices cannot use this authorisation. The paragraph names no ceiling or period of its own; the general rules of the chapter apply. This is part of Chapter 4 as introduced in our article on Advance Authorisation, the four bases and the eligible applicant.
Paragraph 4.04A: Special Advance Authorisation Scheme for apparel
The scheme allows import of fabric without payment of duty, as per the Customs notification issued for the scheme, for export of items covered under Chapters 61 and 62 of ITC(HS), subject to the following terms and conditions. The numbering of the sub-paragraphs in the copy consulted is uneven: it runs (i) to (iv), then (i) again, then (vi) to (viii). The sub-paragraphs are described below in their order of printing and are numbered here (i) to (viii).
| No. in this article | Condition |
|---|---|
| (i) | The authorisation is issued based on Standard Input Output Norms (SION) or prior fixation of norms by the Norms Committee |
| (ii) | It may also be issued on self declaration under paragraph 4.07 of the Handbook; in that case ad hoc norms are fixed within a stipulated time of 90 days |
| (iii) | It is issued for import of the relevant fabrics including interlining only; no other input, packing material, fuel, oil or catalyst is allowed |
| (iv) | Exporters are eligible for the All Industry Rate of Duty Drawback for non-fabric inputs, as determined by the Central Government for this scheme. For the value addition norm of paragraph 4.08 of the Policy, the value of any other input on which drawback is claimed or intended to be claimed equals 22% of the FOB value of export realised. Minimum value addition is as per paragraph 4.09 of the Policy |
| (v) | Where the exporter wants to claim drawback determined and fixed by the jurisdictional Customs Authority (brand rate), he follows paragraph 4.15 of the Policy on the declarations to be made in the application and makes the export under claim for brand rate; value addition is then as per paragraph 4.08, with minimum value addition as per paragraph 4.09 |
| (vi) | The authorisation and the fabric are subject to the actual user condition and are non-transferable even after completion of export obligation. Fabric may be transferred for job work in terms of the GST Acts under intimation to the Customs authority at the port of registration (excluding units in areas eligible for area based exemption from Central Excise Duty). Invalidation of the authorisation is not permitted |
| (vii) | The fabric is subject to a pre-import condition and is physically incorporated in the export product, with normal allowance for wastage. Only physical exports fulfil the export obligation |
| (viii) | Paragraphs 4.02, 4.05(a), 4.13(i), 4.13(ii), 4.14, 4.15, 4.17, 4.19, 4.21(i), 4.21(ii), 4.21(iii), 4.21(iv), 4.22 and 4.23 of the Policy apply in so far as they are not inconsistent with this scheme |
Several features deserve plain explanation.
Fabric only. Condition (iii) restricts the authorisation to fabric including interlining. Buttons, zips, thread, packing material and fuel are outside it. For those, the exporter is dealt with under the drawback conditions of (iv).
Value addition. Condition (iv) fixes the value of other inputs at 22% of the FOB value of export realised, for the purpose of the value addition norm, where drawback is claimed on them. The minimum value addition is in paragraph 4.09 of the Policy, which is explained in our article on minimum value addition, mandatory spares and buyer-supplied inputs. The drawback rate is not given here, because it is determined by the Central Government and not printed in the Policy.
Brand rate. Under (v), choosing the brand rate sends the exporter back to the declarations in paragraph 4.15 of the Policy.
Actual user. Under (vi), the authorisation cannot be transferred or invalidated, and the fabric cannot be sold on. Job work transfers are allowed under the GST Acts with intimation to Customs.
Pre-import and physical export. Under (vii), the fabric must be imported before export and must go into the exported product; deemed exports and intermediate supplies do not discharge the obligation.
What the Handbook requires: paragraph 4.45
Paragraph 4.45 of the Handbook says that the policy on the Special Advance Authorisation for export of articles of apparel and clothing accessories covered under Chapters 61 and 62 of ITC(HS) is in paragraph 4.04A of the Policy. It then lists the Handbook paragraphs that apply to the scheme in so far as they are not inconsistent with it: paragraphs 4.05, 4.06, 4.07, 4.10, 4.11, 4.12(v) and (vi), 4.21, 4.24, 4.25, 4.26, 4.29, 4.33, 4.34, 4.35, 4.37, 4.38, 4.39, 4.40, 4.41, 4.42, 4.43, 4.46, 4.47(b), 4.49, 4.50 and 4.51. The list is a pointer to the general procedure; this article does not restate those paragraphs. The authorisation is applied for online in ANF 4A as described in paragraph 4.02 of the Handbook, which is also covered in the linked article above.
The Policy paragraphs are policy made under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 and name no other section; see our article on section 5 of the FTDR Act. The Handbook rests on the power described in our article on section 6 of the FTDR Act.
A worked example
Saanvi Apparel Private Limited, an invented manufacturer exporter, makes cotton shirts for export. It imports shirting fabric and interlining under a Special Advance Authorisation. Buttons and thread it buys locally and claims drawback on them; for the value addition norm those other inputs are valued at 22% of the FOB value of export realised. The firm keeps the fabric under the actual user condition, may send some for job work under the GST Acts after intimating Customs, and must export the shirts physically to discharge its export obligation. A second firm, Gandhi Spice Mills, imports whole spices and wants only to clean and pack them; paragraph 4.04 does not allow an authorisation for that.
Need help with a council certificate for these sectors?
Spice and apparel exporters are usually tied to a council or board certificate for other benefits. Our team can arrange the registration through our RCMC registration service.
Key takeaways
- Spices of Chapter 9 of ITC(HS) qualify only for processing such as crushing, grinding, sterilisation and oils or oleoresins (paragraph 4.04).
- The Special Advance Authorisation covers fabric including interlining only, for Chapters 61 and 62 of ITC(HS) (paragraph 4.04A).
- Ad hoc norms on self declaration are fixed within 90 days; other inputs are valued at 22% of FOB value for the norm where drawback is claimed.
- The authorisation is actual user, non-transferable and cannot be invalidated.
- Only physical exports fulfil the export obligation.
Read next
- Paragraph 4.06 of the Foreign Trade Policy, 2023: Self Ratification Scheme
- Paragraph 4.07 of the Foreign Trade Policy, 2023: Advance Authorisation for annual requirement
- Duty drawback: rates, claim process and brand rate
- Advance Authorisation inputs, SION and minimum value addition
Disclaimer: Based on the chapter-wise text of the Foreign Trade Policy, 2023 and the Handbook of Procedures, 2023 published on the DGFT website, and on the later Notifications named in this article, as consulted on 2 October 2026. The copies carry no "updated up to" date. Notifications, Public Notices, Trade Notices, the ITC(HS) schedules, Appendices and forms change often; the current text on the DGFT website should be checked before acting. This article is general information, not legal advice; check the official text before acting.