[Opinion] Standard Input Output Norms (SION) for Customs Under DGFT

CA Yash Shah – [2024] 160 taxmann.com 199 (Article)

Introduction

Standard Input Output Norms (SION) are benchmarks that specify the quantity of inputs required to produce a unit of output for a particular product or service. These norms are established by the Directorate General of Foreign Trade (DGFT) in India to regulate and facilitate international trade. SION plays a crucial role in determining the eligibility of exporters for various benefits and incentives provided by the government.

Purpose of SION

• Ensure uniformity and transparency in determining the entitlements of exporters.
• Facilitate the assessment of export performance and compliance with international trade regulations.
• Promote efficiency and competitiveness in the export sector by optimizing resource utilization.
• Encourage value addition and technological upgradation in manufacturing processes.

Components of SION

• Product Description: Each SION specifies the product for which the norms are applicable, along with its detailed description and classification under the Harmonized System of Nomenclature (HSN).
• Input-Output Ratios: SION delineates the quantity and type of inputs required to produce a unit of output. Inputs may include raw materials, components, consumables, energy, and utilities.
• Normative Values: Normative values indicate the permissible limit of inputs for a given output. These values are expressed in physical quantities, such as weight, volume, or units.
• Productivity Parameters: Some SIONs also incorporate productivity parameters, such as yield, wastage, and process efficiencies, to account for variations in manufacturing practices.
• Validity Period: SIONs are periodically reviewed and revised by DGFT to align with changing market dynamics, technological advancements, and trade policies. Each SION specifies its validity period to ensure relevance and accuracy.

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