Expert Assistance

The realm of international trade, encompassing both imports and exports, is governed by a set of procedures and regulations in India. These are primarily aimed at facilitating trade while ensuring compliance with the nation's economic and security interests. 

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Import-Export Code (IEC) Registration

• Mandatory Requirement: The Import-Export Code (IEC) is a fundamental prerequisite for anyone looking to start an import or export business in India. It is a 10-digit alphanumeric code issued by the Directorate General of Foreign Trade (DGFT).

• Lifetime Validity: Once obtained, the IEC has lifetime validity, eliminating the need for periodic renewals.

• Online Application Process: The application for IEC is entirely online through the DGFT website (https://www.dgft.gov.in).

Steps for Registration:

Visit the DGFT website and navigate to the 'Services' tab, then select 'IEC Profile Management' and 'Apply for IEC'.

1. Register on the portal by providing necessary details and verifying with an OTP.

2. Log in and start a fresh application, filling in general information, details of the business owners/directors, bank information, and other required details.

3. Attach the Digital Signature Certificate (DSC) and make the online payment of the application fee (currently ₹500).

4. Upon successful payment, the IEC certificate is usually sent to the registered email ID and can also be downloaded from the DGFT portal.

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Documents Required

The specific documents may vary based on the type of entity but generally include:

• PAN card copy of the individual, firm, or company.

• Address proof of the business premise (e.g., sale deed, rent agreement, utility bills).

• Identity proof of the proprietor/partners/directors (e.g., Voter ID, Aadhaar card, Passport).

• Proof of establishment/incorporation/registration (e.g., partnership deed, certificate of incorporation).

• Cancelled cheque of the current bank account of the entity.

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Essential Documents for Import and Export

Besides the IEC, several documents are crucial for the customs clearance of goods:

For Imports:

• Bill of Entry: A legal document filed by the importer for customs clearance, detailing the shipment.

• Commercial Invoice cum Packing List: Contains details of the goods, their value, and packaging.

• Bill of Lading/Air Way Bill: A document of title and a receipt for the shipment.

• Import License: Required for specific restricted goods.

• Insurance Certificate: To verify if the shipment is insured.

• Purchase Order: Outlines the terms and conditions of the sale.

• Certificate of Origin: Specifies the country where the goods originated.

For Exports:

• Commercial Invoice: A legal document between the exporter and buyer.

• Shipping Bill/Bill of Export: Details the goods being exported.

• Packing List: Specifies the contents of each package.

• Bill of Lading/Air Way Bill: Similar to imports, but issued by the carrier for export.

• Export License: Required for certain restricted goods.

• Customs Declaration Form: A form to be signed and submitted to customs.

• Warehouse Receipt: Proof that the goods are ready for shipment.

• Foreign Exchange Control Form (SDF): For foreign exchange regulations.

Depending on the nature of the goods, additional documents like inspection certificates, technical standards certificates, or dangerous goods forms might be required.

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Key Features and Compliance

• PAN-Based: The IEC is linked to the Permanent Account Number (PAN) of the individual or business entity.

• Mandatory Annual Update: It is now mandatory to update the IEC profile on the DGFT website every year between April and June. Failure to update may lead to the deactivation of the IEC.

• Exemptions: IEC is generally not required for service exports, except when the service provider is seeking benefits under the Foreign Trade Policy.

The Import Export Code (IEC) is a crucial 10-digit identification number in India for businesses engaged in international trade. Here is some other key information:

 

1. Mandatory Annual Updation

• Requirement: While the IEC has lifetime validity, it is mandatory for every IEC holder to electronically update and validate their details on the Directorate General of Foreign Trade (DGFT) portal annually between April and June.

• Even if there are no changes to the business details, the IEC holder must log in and confirm that the existing information is correct.

• Consequence of Non-Updation: Failure to update or confirm the details annually will lead to the deactivation of the IEC. A deactivated IEC prohibits a business from conducting any import or export activities. It can be reactivated only after the update process is successfully completed.

 

2. Cases Where IEC is Not Mandatory

IEC registration is generally mandatory for all imports and exports, but there are a few specific exemptions:

• Personal Use: Import or export of goods for personal use that is not connected with trade, manufacturing, or agriculture.

• Government Entities: Imports and exports by Ministries or Departments of the Central Government or State Government, and notified charitable institutions.

• Service/Technology Exports: For the export of services or technology, the IEC is not required unless the service provider is seeking benefits under the Foreign Trade Policy.

• GST-Registered Entities: While DGFT still issues a separate IEC, for those registered under GST, the PAN of the entity is used as the IEC for import and export activities. However, the mandatory annual updation on the DGFT portal still applies.

 

3. Key Benefits of IEC

• Legal Requirement: It is the primary legal requirement to engage in international trade in India.

• Customs Clearance: It is essential for customs clearance of shipments at ports and airports.

• Government Benefits: An IEC is required to avail various benefits and incentives provided by the DGFT, Customs, and Export Promotion Councils, such as schemes like RoDTEP (Remission of Duties and Taxes on Exported Products) or similar government export promotion schemes.

• Banking Transactions: Banks require the IEC to process foreign currency transactions related to imports and exports.

 

4. IEC Structure

• The IEC is a 10-digit alphanumeric code issued by the DGFT.

• Consequent to the introduction of GST, the IEC issued to an entity is generally the same as its Permanent Account Number (PAN), though it is still separately issued and managed by the DGFT.