Paragraph 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 4.06 lets an eligible exporter obtain an Advance Authorisation on self declaration and self ratification, without sending the norms to a Norms Committee, where no norm exists or where additional inputs are used. The application carries a Chartered Engineer certificate. The scheme has eligibility conditions, exclusions, a pre-import requirement, audit and penal consequences, and paragraph 4.07A of the Handbook gives the procedure.
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. A firm weighing this route against a Norms Committee reference can discuss it first through a legal consultation.
An eligible exporter may apply for an Advance Authorisation on self declaration and self ratification where there is no SION or valid ad hoc norm, or where SION exists but additional inputs are used (paragraph 4.06(i)). The application carries a Chartered Engineer certificate from an engineer not penalised in the last five years (paragraph 4.06(ii)). Wrong claims lead to audit, demand and recovery, and action under the Act (paragraph 4.06(x) to (xiii)).
When the scheme applies: paragraph 4.06(i)
Where there is no Standard Input Output Norm (SION) or valid ad hoc norm for an export product, or where a SION has been notified but the exporter intends to use additional inputs in the manufacturing process, an eligible exporter can apply for an Advance Authorisation under this scheme on self declaration and self ratification. The paragraph explains "additional inputs": it refers not to extra quantity or value of an input specified in a norm, but to another additional input. If the norm specifies inputs X1 and X2, then input Y is an additional input. The Regional Authority may issue the authorisation, and such cases need not be referred to Norms Committees for ratification of norms. The application is made with a certificate from a Chartered Engineer in the prescribed format.
The Chartered Engineer: paragraph 4.06(ii) and (xiii)
A certificate is accepted only from a Chartered Engineer who has not been penalised in the last five years under the Foreign Trade (Development and Regulation) Act, 1992, the Customs Act, 1962, the Central Excise Act, 1944, the GST Acts and allied acts and the rules made under them. Where a Chartered Engineer has not exercised due diligence or has wilfully become a party to mis-declaration, action is initiated under the Act and the case is referred to the Institution of Engineers named in the paragraph. Under paragraph 4.07A(vii) of the Handbook, the Chartered Engineer is also liable for penal action for abetment under section 11(2) of the Act. See our article on section 11 of the FTDR Act on contravention, penalty and settlement.
Who is eligible: paragraph 4.06(iv)
The copy consulted has two sub-paragraphs numbered (iv). The first concerns exporters with AEO status. The second concerns two-star status holders.
AEO certificate holders
An exporter, manufacturer or merchant, who holds an Authorised Economic Operator (AEO) certificate under the Common Accreditation Programme of the Customs Board named in the paragraph is eligible to opt for the scheme. For the AEO tiers, see our guide on AEO certification and the AEO tiers.
Two-star status holders awaiting AEO
A status holder who is a manufacturer cum actual user and holds valid 2-star or above status under paragraph 1.25 of the Policy, and who has already applied for AEO on the Customs AEO portal, is also eligible, on these conditions:
- it submits a copy of the numbered and dated acknowledgement of its AEO application;
- it undertakes to DGFT that its AEO application has not been rejected; that there is no infringement of Customs and allied laws and no show cause notice from Customs or GST authorities in the current year and last three financial years; that it has positive net current assets; and that no insolvency, bankruptcy or liquidation proceedings were taken against it in the same period;
- if it cannot obtain AEO certification within 120 days from the date of its application under this scheme paragraph, the facility stands withdrawn, it must approach the Norms Committee for norms, and no further authorisation under the scheme is issued to it;
- DGFT may deny an authorisation to a two-star or higher status holder on its risk management principles; and
- the status holder is audited by DGFT as laid down in the Handbook.
What is excluded: paragraph 4.06(vi) and (vii)
The scheme is not available for export products in the ITC(HS) chapters that the paragraph lists (many food and agricultural chapters and one chapter on jewellery), biotechnology items and SCOMET items. It is also not available for a list of inputs that includes edible oils and oilseeds, cereals, animal organs, wild animal products, honey, fruits, nuts and vegetables, textile-chapter items, three controlled chemicals, vitamins, biotechnology items, pesticides and similar products, waste and scrap, second-hand goods, and all items with basic customs duty of 30% or more. The input list is lettered A to L and then J, K and L again in the copy; it is summarised as printed. Check the item's entry in ITC(HS); this article gives no chapter or code.
Conditions of use: paragraph 4.06(viii) and (ix)
Imported inputs are subject to a pre-import condition and must be physically incorporated in the export product, with normal allowance for wastage; locally procured inputs must be procured before manufacture. Where the value of by-products and recoverable wastage is more than 5% of the CIF value, a corresponding quantity of main input is reduced from the entitlement.
Audit and consequences: paragraph 4.06(x) to (xiv)
The Norms Committee may audit the manufacturer, who must give facilities to verify books of account. Non-availability of production and consumption documents is treated as mis-declaration and penalised under the Act. A special audit may be started at any stage if norms appear to have been wrongly claimed, even if the manufacturer was audited before. If the audit finds mis-declaration, inputs claimed but not used, or excess quantity, demand and recovery actions follow, together with action against the authorisation holder, the manufacturer and the Chartered Engineer under the Act or the Customs Act. All provisions of the Advance Authorisation scheme apply so far as not inconsistent.
What the Handbook requires: paragraph 4.07A
- (i) Applications are filed online with complete details as per Appendix 4E and a certificate from a Chartered Engineer in Appendix 4K. The Chartered Engineer acts only in the domain of his or her competence.
- (ii) to (iv). The applicant applies for inputs with specific descriptions and the 8-digit ITC(HS) classification. The Regional Authority may issue the authorisation as applied for; the norms and wastage as applied are final, with no ratification by the Norms Committee.
- (v) and (vi). The applicant or supporting manufacturer keeps an account of consumption as prescribed in Appendix 4H, submits it with the application for EODC and preserves records for three years from the date of the Export Obligation Discharge Certificate. The Norms Committee may audit within three years from the date of issue, based on the Risk Based Management System.
- (vii) Non-submission of documents to the audit team makes the applicant liable for penal action under the Act. If items are found imported in excess or not fully consumed and duty and interest have not been paid on the applicant's own motion, the applicant is placed under the Denied Entity List under rule 7 of the Foreign Trade (Regulation) Rules, 1993; see our article on rule 7.
Appendices 4E, 4K and 4H are named only.
The Policy is made under section 5 of the Foreign Trade (Development and Regulation) Act, 1992; see our article on section 5 of the FTDR Act. The Handbook rests on section 6.
A worked example
Mehta Polymers Private Limited, an invented manufacturer with a valid AEO certificate, makes a product for which a SION exists, but it wants to add another input not in the norm. Under paragraph 4.06(i) the extra input is an additional input. It applies with a Chartered Engineer certificate (Appendix 4K), and the Regional Authority issues the authorisation without referring it to the Norms Committee. If an audit later finds excess duty-exempt inputs and duty and interest have not been paid on its own motion, paragraph 4.07A(vii) allows placement on the Denied Entity List.
Need help with a self-ratification application?
The scheme saves time at the start and costs more if the records fail an audit. Our team can review the eligibility and the documents with you through our legal consultation service.
Key takeaways
- The scheme applies where no SION or ad hoc norm exists, or where additional inputs are used (paragraph 4.06(i)).
- A Chartered Engineer not penalised in the last five years certifies the application (paragraph 4.06(ii)).
- AEO holders and certain two-star status holders awaiting AEO may use it (paragraph 4.06(iv)); the 120-day condition applies to the latter.
- Listed products and inputs are excluded, including items with basic customs duty of 30% or more.
- Audit within three years and the Denied Entity List are the consequences of excess imports (Handbook paragraph 4.07A).
Read next
- Paragraph 4.07 of the Foreign Trade Policy, 2023: Advance Authorisation for annual requirement
- Paragraphs 4.04 and 4.04A of the Foreign Trade Policy, 2023: Advance Authorisation for spices and apparel
- Authorised Economic Operator (AEO) in customs
- Rule 7 of the Foreign Trade (Regulation) Rules, 1993: refusal of licence and recovery of benefits
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.