India has seen a tremendous increase in imports and exports various essential and luxury commodities over the past few years. More companies have started an import-export business in India owing to ecommerce and ease of starting a business. Companies that wish to start an import-export business in India need to adhere to certain legal procedures and one of them is Import Export Code (IEC) registration.
What Is Import Export Code (IEC)?
Import Export Code or Importer Exporter Code (IEC) is a unique 10-digit code that is granted by the Director General of Foreign Trade (DGFT) of the Ministry of Commerce. Import Export Code (IEC) is a unique code to undertake any kind of international trade in India.
Import Export Code registration is required for all individuals and businesses that wish to start an import-export business for goods or services from India. importing or exporting goods and services from India. IEC certificate is a one-time registration that does not need any renewals and is valid for the lifetime of the company.
Why Is Import Export (IEC) Code Needed?
Import Export Code (IEC) Registration in India is compulsory to conduct the import or export for any kind of goods or services. The IEC code is required at the time of customs clearance and banks require IEC code when money is to be transferred abroad for any business purposes.
When it comes to exports from India, the IEC code is required at the time of sending any shipments of goods and banks require IEC code when money is to be received from foreign sources.
IEC code is also required compulsorily to avail the following benefits and schemes in India:
- A concession in taxes for Merchant Exporters
- Advance Authorization Scheme
- Merchandise Exports from India Scheme
- Service Exports from India Scheme
- Duty Free Import Authorization Scheme
- Export Promotion Capital Goods Scheme
- Clearance of import shipments by the importer from customs authorities
- Outward remittances by importer towards import payments
- Clearance of export shipments by exporter at customs port
- Inward remittances by exporter towards export realisations
Who Can Apply For Import Export Code (IEC) Registration?
Any individual or business in India who wishes to engage in any form of import or export can apply for IEC certification. Only Indian entities can apply for the IEC code and no foreign company can apply to get an IEC in India.
Procedure Of Import Export Code (IEC) Registration
An application must be filed with the Regional Authority of DGFT to obtain the Import-Export Code registration certificate. The application must be filed with the DGFT office that has territorial jurisdiction over the area where the business would be conducted and accompanied with the requisite documents.
In case of Export Oriented Unit (EOU) Scheme, Electronic Hardware Technology Park (EHTP) Scheme or Software Technology Park (STP), the regional office of the DGFT having the jurisdiction over the district where the registered office of STPI unit is located, is to be approached for obtaining or amending the IEC certificate.
The IEC number granted to the business is also valid for anybranches, divisions, factories, units, warehouses, etc. of the business.
Documents Required For IEC Code Registration
The following documents are needed to apply for an IEC Code in India:
- Letter head of the company.
- Payment receipt of the application fee,
- Copy of PAN card.
- Passport-size photographs.
- ID proof of the applicant such as Aadhar card, driving license, passport.
- Address proof such as electricity bill or rent agreement (if the property is rented).
- Certificate from the Banker of the applicant firm in the format given in Appendix 18A.