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Overview of AD Code

For starting any business of Import and Export in India, one must have two Registrations as per the Indian Government, out of which one is IEC (Import-Export Code) and another one is AD (Authorised Dealer) Code Registration.

AD Code is a 14-digit number issued for the customs clearance of the goods. This AD Code aims to ensure that the foreign currency used for transactions in an exporter’s current account comes from a legal channel.

AD Code is provided by the bank where he holds the business or current account. AD Code is printed on the bank’s letterhead in the set format as prescribed by the Directorate General of Foreign Trade (DGFT). The bank which is authorised to grant AD Code must deal with foreign currency. Registering AD Code at the port where goods are sent for custom clearance is mandatory. Without port registration of AD Code, the shipping bill number will not be generated, which is a must for the export of goods.

On 14th June 2022, the Directorate General of Systems and Data Management issued new changes made in respect of the AD Code. The new changes are as follows:

  • AD Code with an associated bank account is now required to register in the system at only one port rather than registering at every port, and thereafter the AD Code is made available at all customs locations. And the same is required to register online at ICEGATE. Earlier, AD Code was required for each port separately for custom clearance of export or import of goods. 
  • Once an AD Code is registered against an Import-Export Code at any port, then the same can be used for all ports. And there is no requirement for separate registration at other ports for filing of necessary papers.
  • Any change or amendment in a particular AD Code account details is to be done at that port of registration only; the post selected by the Import Export Code (IEC) at the time of making the application for registration.
  • Multiple AD Codes and associated accounts can be registered against an Import-Export Code (IEC). All multiple AD Codes must register in the system at any of the ports. There can be different ports of registration for different AD Codes.
  • For existing AD Codes and associated accounts registered for an IEC, the customs port where the last shipping bill with a specific AD Code is filed is deemed a port of registration for that AD Code in the system.
  • The details of the port of registration for each registered AD Code against an IEC are made available on the ICEGATE.

Benefits of AD Code

Following are the various benefits of obtaining AD Code:

  • It assists in developing business and reaching out to a bigger market at the global level. It allows the business to flourish at a rapid pace. 
  • Obtaining an AD Code is a one-time process. It means there is no requirement to submit any returns.
  • The AD Code is valid till the existence of the business of its holder. So, there is no requirement to renew it. 
  • Based on the AD Code, the businesses receive multiple incentives for their imports or exports from the Directorate General of Foreign Trade, Export Promotion Council, Customs and several other Government Departments.
  • It is one of the crucial necessary papers to be submitted for export customs clearance. Without it, one cannot produce a shipping bill on ICEGATE, the Indian Customs Electronic Data Exchange Platform. 
  • AD Code allows transferring credit to the trader’s current account directly.
  • Any Government advantages one wishes to avail of are credited straight to his current account if he has an AD Code registered custom. 

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Necessary Papers Required to Obtain AD Code

Following are the necessary papers that are required to be submitted while obtaining the AD Code:

  • Original AD Code Authorisation letter of the bank
  • Exporter’s letter on the letterhead requesting or authorising the registration of AD Code
  • Customs broker’s letter on the letterhead requesting AD Code Registration
  • GST Registration Certificate
  • Recent IT returns
  • Copies of bank proclamation 
  • Import-Export Code License
  • PAN Card of company
  • Export House Certificate 
  • Manufacturing License
  • Identity proofs of the owner/partner, such as Aadhar Card, PAN Card, Voter ID Card or Passport

Procedure to Obtain AD Code

One has to request their bank for the grant of information on the AD Code of the bank. Once the bank gets the letter of request, then it provides the information in writing. Such a letter must contain information about the applicant’s organisation or business and the export transaction. The complete procedure for obtaining the AD Code is as follows:

  • The applicant needs to have a current account in a bank that deals in foreign exchange.
  • An application to the Branch Manager of the bank where the applicant has the current bank account is made by the applicant in the prescribed format.
  • Bank issues a 14-digit AD Code on its letterhead as per the prescribed standard by the Directorate General of Foreign Trade (DGFT).
  • After obtaining the AD Code from the bank, the applicant registers it with the port from where the goods are to be exported/imported. Nowadays, it is also done through Indian Custom Electronic Gateway, ICEGATE.
  • An ID is created at the ICEGATE portal using organisational-based class 3 DSC.
  • All required necessary papers are collected, and an application is filed at the custom house.
  • Once all the necessary necessary papers are submitted, including information related to exporter and shipping of consignment, then the Registration of AD Code is done.

Frequently Asked Questions

The Reserve Bank of India (RBI) grants or assigns an AD Code to each authorised bank and its branch that deals with foreign exchange.

All exporters and importers of goods in India are required to obtain the AD Code as it is mandatory for customs clearance.

No, Importers cannot import their goods without an AD Code as they cannot generate shipping bills and won’t be able to do foreign remittances without an AD Code.

The Customs Department maintains the records and verifies the AD Code, and it also allows clearance after verifying the AD Code.

The bank issues an AD Code Letter, mentioning the name and address of the exporter or importer, IEC number (issued by DGFT), bank account details, and duration of the account an exporter or importer has with the bank.

AD Code Letter is required for registering at the port where customs clearance is done.

Yes, the AD Code can be changed or modified through the ICEGATE portal.

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