AEO Registration in India: Eligibility, Types, Benefits and Process

Posted by Akshay Tiwari on August 30th, 2023

The Authorized Economic Operator (AEO) was introduced under the SAFE Framework of Standards. AEO focuses on granting the AEO status to businesses that are involved in the international supply chain and satisfy the criteria of the AEO programme. AEO has become the benchmark in the international supply chain and assumes prime importance for businesses engaged in this sector. Let’s understand the intricacies of AEO registration in India.

Types of AEO Registration

AEO certification in India has been divided into different tiers with AEO-T3 being the highest level of accreditation. All three tiers provide varied and an increasing level of facilitation to the status holders. Here’s a brief description of the different types of AEO registration:

• AEO-T1: It is granted only to the importer and exporter that fulfils the specified criteria. AEO-T1 certification is verified based on document submissions only.
• AEO-T2: It is also granted only to the importers and exporters that fulfil the specified criteria. Apart from AEO-T1 compliance, on-site verification and document verification are also done in AEO-T2 certification.
• AEO-T3: It is also granted only to the importers and exporters that fulfil the specified criteria. It is the highest level of AEO accreditation. Physical verification is also a part of the verification procedure in the case of the AEO-T3 certification.
• AEO LO: AEO LO is applicable to all other economic operators apart from the importers and exporters. It normally includes customs brokers, logistics providers, custodians or terminal operators, warehouse operators etc. AEO LO certification is subject to document verification and on-site verification.

Benefits of AEO Registration

AEO status holders enjoy a lot of benefits of AEO certification including but not limited to the following:

• Direct port delivery and direct port entry for containers are allowed.
• It facilitates a reduction in the bank guarantee.
• It allows quicker release of cargo.
• It facilitates dispute resolution within 6 months.
• It facilitates faster completion of the various customs procedures and investigations like special valuation branch investigations or any other investigation.
• It allows for 24/7 clearances upon request at all the airports and sea ports.
• It allows deferring the payment of duty.
• It expedites the process of refund, including IGST.

Following were some of the many benefits of AEO registration in India. However, the benefits may defer depending upon the type of AEO status you hold.

Who Can Apply for AEO Registration?

Any business entity that is engaged in the international supply chain and carrying out customs-related functions can apply for AEO registration. This includes the following:

• Importers
• Exporters
• Logistics service provider
• Warehouse operators
• Custodians and terminal operators
• Port operators
• Customs house agents

Eligibility for AEO Registration

In order to obtain AEO registration, you need to fulfil the following eligibility criteria for AEO certification:

• The concerned business entity must be established in India
• The business must be involved in customs-related activity or international supply chain
• It must have handled at least 25 customs-related documents i.e., either bills of entry or shipping bills in the last financial year.
• It must be carrying out customs-related activity for at least the last 3 financial years.
• The business must not have been issued a show cause notice during the last 3 financial years involving frauds, forgery, outright smuggling, clandestine removal of excisable goods or any case where service tax is collected but not deposited with the government.
• The business should have a system of managing transport and commercial records.
• The business should be solvent during the last 3 financial years preceding the date of application for AEO status.
• It should have appropriate internal control measures in place to ensure the security and safety of the business and its supply chain.

Process of AEO Registration

The process of AEO registration requires an online application in the prescribed form along with all the necessary applications. Once the form is submitted and requisite fees are paid, the authorized officer will scrutinize the application. Physical verification will be conducted if prescribed as per the procedure. Once the due procedure is completed, the concerned officer will decide on the approval or rejection thereof.

Summing Up

The following were complete details relating to AEO certification in India. In case you fall under the above categories of business entities, then obtaining AEO registration can further contribute towards your business growth and expansion. In case you need any assistance in relation to AEO registration in India, feel free to reach out to ASC Group.