Overview

IEC stands for the Importer-Exporter Code, a vital identification number for import and export businesses. It is mandatory; without this, no person can import or export. The Directorate General of Foreign Trade grants it under the Ministry of Commerce and Industry, Government of India. It is a ten-digit number given to the importer or exporter with lifetime validity; however, it must be updated annually between April and June to avoid deactivation. 

The essential requirement for IEC is calculated in the following situations:

• Customs Authorities need it at the time when the importer is clearing the shipment from customs. 
• When an importer uses any bank to send the money abroad, then the bank needs it.
• Custom Ports need it when an exporter has sent the shipments.
• The bank needs it when the exporter is paid money directly in his bank account as foreign currency. 

A person who wants to import or export goods for business purposes or any service provider with clients abroad needs IEC mandatorily. To obtain this Code, the entity must be registered, and here is the list of those who can get it from the Directorate General of Foreign Trade (DGFT):

• Proprietorship Firm:

A person engaged in carrying out import or export business.

• Partnership Firm:

 If partners of a Partnership Firm are engaged in import or export business.

• Limited Liability Partnership:

A Partnership formed and registered as per the provisions of the LLP Act,i.e., Limited Liability Partnership Act, 2008, and also engaged in export-import business. 

• Private Limited Company

If the company is formed and registered under the Companies Act, 1956 or 2013 and such company is engaged in export-import business.

• Trust

If any trust is engaged in business involving foreign trade or transaction on behalf of a beneficiary.

• Hindu Undivided Family

In a Hindu Undivided Family (HUF), the Karta and sole members must obtain this Import-Export Code if the HUF is involved in such business. 

• Society

A society established under the Societies Registration Act or Co-operative Societies and carrying out import-export business.  

However, some categories of importers or exporters are exempted from obtaining IEC, and they are discussed hereunder:

• Importers and exporters that are covered under clause 3(1) and clause 3(2), respectively, of the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order of 1993.
• All ministers or departments of the Central or State Government.
• Any person engaged in import and export for his personal use, and such transaction is not related to trade, manufacture, or agriculture. 
• Any person importing from or exporting to Nepal provided the Cost, Insurance, and Freight value (CIF Value) of each consignment is not more than Indian Rs. 25,000.
• Any person importing from or exporting to Myanmar via the Indo-Myanmar border provided the Cost, Insurance, and Freight value (CIF Value) of each consignment is not more than Indian Rs. 25,000.

Benefits

Getting an Import-Export Code (IEC) offers several advantages for businesses. These include: 

• Simplified business processes: Obtaining an IEC is a straightforward process that enables entities to clear their goods through customs with ease.  
• Business expansion: An IEC allows businesses to expand globally and access new markets, suppliers, and growth opportunities. 
• Facilitation of cross-border transactions: IEC makes cross-border transactions easy and legal. It also reduces the risk of any illegal cross-border transaction as entities with IEC are considered to be verified. 
• Access to government schemes: Businesses with an IEC can benefit from schemes such as MEIS, the RoSCTL scheme, and other incentives for exporters and importers. 
• No return filing required: IEC does not require filing of returns. 
• No need for renewal: IEC is valid forever till the entity exists and does not require further renewal as long as the entity is in operation. It saves time and money from periodical renewal. 
• Increased credibility: IEC certification proves that the entity is engaged in legal business and can avail government benefits. It helps entities earn the trust of their valuable customers, and financial institutions and banks regard them as reliable and trustworthy.

Documents

Documents required for getting IEC are as follows:

• Details of Applicant
• Name of Business Entity 
• Constitution of business
• Description of business
• Business Activity
• Date of Incorporation
• Proof of Incorporation/Registration/Establishment
• Principal Place of Business Entity, including address
• Proof of Address such as sale deed, rent agreement, utility bills, lease deed, partnership deed, MOU
• No Objection Certificate (NOC), if needed)
• Branch details 
• PAN Card
• Aadhar Card
• Personal information, including mobile number and email ID. 
• Bank Account detail

Procedure

The following are the steps to be followed to obtain an Import-Export Code, i.e., IEC:

• Registration Process:

The first step to start the application process is to visit the website of the DGFT and register online. On the website, the applicant has to go to the IEC profile management. Here, the applicant will receive a separate ID and password for further processing. After adding all the required details, an OTP is generated, and after providing the same, the registration process of the applicant is completed.

• Application Process:

Once registration is completed, the applicant must review all the information provided and accept the declaration. The applicant then has to submit the online application form along with the required documents. 

• Verification:

After successfully submitting the application form, the DGFT verifies all the documents along with the same. The authority then accepts or rejects the documents provided by the applicant. 

• Payment:

After successfully submitting the application form and verification of all the documents, the applicant has to make the required payment. 

• Issue of IEC:

After completion of all the steps mentioned above, the applicant can now receive the IEC Certificate. 

Why Adviso?

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