IEC

Importance of Import Export Code

The Import Export Code (IEC) is crucial for businesses engaged in international trade as it serves several important functions:

1.   Legal Requirement: IEC is mandatory under the Foreign Trade Act, 1992, ensuring compliance with trade regulations and preventing illegal trading practices.

2.   Customs Clearance: The IEC is required by customs authorities to clear shipments, ensuring that goods meet legal norms before they are imported or exported.

3.   Bank Transactions: Banks require the IEC for processing international trade transactions, verifying the legitimacy of these transactions in accordance with trade laws.

4.   Access to Government Benefits: Businesses with an IEC can avail themselves of various government incentives such as duty drawbacks, export promotion schemes, and subsidies.

5.   Enhanced Credibility: Having an IEC enhances a business’s credibility in the international market, serving as proof that the business is registered and recognized by the Indian government for conducting import-export activities.

6.   Trade Data Collection: The IEC helps the government collect and analyze trade data, which is essential for formulating effective trade policies.

Validity of IEC Code

The Import Export Code (IEC) has a lifetime validity. Once obtained, it does not need to be renewed periodically. However, it is essential to keep the details updated. Any changes in bank details, address, or other relevant information must be updated through the DGFT portal to ensure compliance with regulations. Failure to update may lead to deactivation of the IEC.

What is an IEC Certificate?

An IEC certificate is a 10-digit unique identification number issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, Government of India. This certificate is mandatory for individuals or businesses engaged in importing or exporting goods and services from India. It serves as proof that a business is authorized to conduct international trade activities and facilitates customs clearance and banking transactions related to imports and exports.

How do I download the IEC Certificate Online?

To download your IEC certificate online, follow these steps:

1.   Visit the DGFT Website: Go to the official Directorate General of Foreign Trade (DGFT) website at dgft.gov.in.

2.   Log In: Enter your login credentials (username and password) to access your account.

3.   Navigate to Services: Click on the ‘Services’ tab on the homepage.

4.   Select IEC Profile Management: Find and select ‘IEC Profile Management’ from the dropdown menu.

5.   Locate My IEC: Scroll down to find ‘My IEC’ option.

6.   Print IEC Certificate: Click on ‘Print IEC’ to download your certificate in PDF format.

By following these steps, you can easily obtain a copy of your Import Export Code certificate whenever needed.

How to Apply for an IEC Certificate

To apply for an Importer Exporter Code (IEC) certificate in India, follow these steps:

1.   Eligibility Check: Ensure that you are eligible to apply for an IEC. Any individual or entity engaged in import or export activities can apply.

2.   Documents Required: Gather the necessary documents, which typically include:

·         PAN card of the applicant or business entity.

·         Aadhar card or any other identity proof.

·         Bank account statement or cancelled cheque.

·         Address proof of the business (like a utility bill).

·         Passport-sized photographs (if applicable).

3.   Online Application: Visit the official Directorate General of Foreign Trade (DGFT) website dgft.gov.in. You will need to create a login ID and password if you do not already have one.

4.   Filling the Application: Fill out the application form (ANF 2A) online. Ensure all details are accurate and match your documents.

5.   Payment of Fees: After submitting the application, pay the required fee online through net banking or credit/debit card.

6.   Submission and Verification: Once submitted, your application will be verified by DGFT officials. If everything is in order, you will receive your IEC certificate via email.

7.   Receiving IEC Certificate: The IEC certificate is usually issued within 3-7 working days after successful verification.

Cost of IEC Certificate

The cost associated with obtaining an IEC certificate is relatively low compared to other business registrations. As of now, the fee for applying for an IEC is approximately ₹500 (Indian Rupees). This fee may vary slightly depending on payment methods or any additional services you might choose during the application process.

Benefits of an IEC Certificate

Having an IEC certificate provides several advantages:

1.   Legal Requirement: It is mandatory for anyone looking to engage in international trade in India; without it, you cannot import or export goods legally.

2.   Access to Global Markets: An IEC allows businesses to access global markets and expand their reach beyond domestic boundaries.

3.   Government Support: Holders of an IEC may avail themselves of various government schemes and incentives designed to promote exports.

4.   Banking Facilities: An IEC can facilitate easier transactions with banks when dealing with foreign currency and international payments.

5.   Credibility: Having this certification enhances your credibility as a legitimate trader in international markets, which can help build trust with foreign partners and customers.

Validity of IEC Certificate

The Importer Exporter Code does not have a validity period; it remains valid indefinitely as long as there are no changes in the ownership structure or business activities that require re-registration or modification of details with DGFT. However, it is essential to keep your information updated with DGFT whenever there are significant changes such as address change or change in business structure.

Need for Different IEC Numbers

In general, each firm must obtain its own unique Importer Exporter Code if they operate as separate legal entities. This means that if you have multiple firms under different names or structures (like partnerships versus sole proprietorships), each will require its own distinct IEC number. However, if multiple branches operate under one legal entity but at different locations, they can use the same IEC number provided they inform DGFT about their branch operations accordingly.

What documents are required to obtain an IEC?

To obtain an IEC, applicants must provide specific documents that verify their identity and business operations. Here’s a step-by-step breakdown of the required documents:

1.   Application Form:

·         The applicant must fill out the application form for IEC, which is available online on the DGFT website.

2.   PAN Card:

·         A copy of the Permanent Account Number (PAN) card of the applicant or the business entity is required. This serves as proof of identity and tax registration.

3.   Business Registration Proof:

·         Depending on the type of business entity, different documents are needed:

·         For sole proprietorships: A certificate of registration or any other document that proves the existence of the business.

·         For partnerships: A partnership deed.

·         For companies: Certificate of incorporation and Memorandum and Articles of Association.

4.   Address Proof:

·         The applicant must provide proof of address for both the business premises and personal residence. Acceptable documents include utility bills, lease agreements, or property tax receipts.

5.   Bank Account Details:

·         A cancelled cheque or bank statement from a current account in the name of the business entity is required to facilitate transactions related to international trade.

6.   Digital Signature:

·         A digital signature may be required for online submission of applications.

7.   Other Supporting Documents:

·         Depending on specific circumstances, additional documents may be requested by DGFT officials during processing.

Exemptions from Obtaining an IEC

While obtaining an IEC is generally mandatory for engaging in import and export activities, there are certain exemptions where individuals or entities may not need to apply for one:

1.   Goods Imported/Exported by Government Departments:

·         Government departments and ministries do not require an IEC when they are importing or exporting goods for official purposes.

2.   Personal Effects:

·         Individuals importing personal effects such as used household items, gifts, or personal belongings may not need an IEC if these items fall under specified limits set by customs authorities.

3.   Certain Specified Goods:

·         Some specific categories like certain types of donations or gifts may also be exempt from requiring an IEC based on regulations set forth by customs authorities.

4.   Small Scale Industries (SSI):

·         Small scale industries with limited export turnover might have some exemptions under certain conditions; however, it’s advisable to check with relevant authorities for clarity.

In conclusion, while most businesses engaging in international trade will need to obtain an IEC along with necessary documentation such as PAN card, business registration proof, address proof, bank details, and possibly a digital signature, there are specific exemptions primarily related to government entities and personal imports/exports that do not necessitate this code.