IEC Registration

IEC Registration – An Overview

IEC Registration empowers businesses to trade worldwide and expand their operations beyond the borders.

Foreign investment options became available after India was liberalised in 1991, enabling Indian companies to make outside investments. Simultaneously, the Ministry of Commerce and DGFT of the Government of India created the Import Export Code (IEC) certification to make import-export procedures simpler for enterprises. By fulfilling certification requirements, enterprises can register for IEC and gain access to government advantages and potential for diversification.

It is a need for companies wishing to trade worldwide, providing several benefits that are essential for successfully navigating international markets and adhering to local and international regulatory frameworks.

What is an Import Export Code?

An Import Export Code (IEC) is a unique 10-digit number provided by the Ministry of Commerce, Government of India's Directorate General of Foreign Trade (DGFT). It is necessary for companies or people engaged in the import or export of products and services from India.

The IEC is necessary to clear products through customs, transfer money from overseas, and take advantage of other government incentives and privileges. For Indian entities engaged in foreign trade, it functions as the key identifying number.

When is an IEC Required?

There are certain specific situations where it is mandatory for the businessman to have the IEC Registration. These situations are as follows –

• The importer must provide the customs authorities with the IEC registration certificate when the customs need to clear the shipment.
• The banks require the IEC in cases where the importer transfers money outside India.
• The customs port requires the IEC in case the exporter wishes to dispatch its shipments. 
• In a case where the exporter receives money from foreign land in their bank, it is made mandatory to provide an IEC registration number.
• The code is required to obtain food licensing and FSSAI Registration.
• The code is required by the exporters in case they must avail of any government subsidy.
• The code is required for APEDA registration.

Features of Import Export Code

Import Export Code is a very useful requirement for businesses as it helps them in various ways. Some of the features of the code are as follows:

1. Mandatory Requirement

Without IEC Registration, the businesses are not permitted to carry out any import and export-related activities. Hence, it’s compulsory for all the business entities to proceed with the IEC Registration.

2. Evidence and Legal Testament

IEC Certification allows businesses to be carried out smoothly as it acts as legal evidence and testament that the business complies with all the necessities of the DGFT.

3. Lifetime Validity

Only one-time registration is required for this certification. So, as per it, once the business is registered, it’s for a lifetime (of the business entity). This prevents the applicant from spending extra time on certification renewal.

4. Legal Compliance

It is a mandatory requirement that the businesses must undergo this type of registration. Other than this, there is minimal compliance once the business user has undergone the registration process under this system.

5. Foreign Bank Transfers

Quoting the Import Export Code is mandatory for a business while making foreign bank transfers.

6. This code could be used by All Entities

This code could be utilised by all the business entities for carrying out the different forms of import and export processes.

Benefits of Import Export Code Registration

There are many benefits of import export code registration that must be looked at before proceeding with the registration application. These are as follows –

1- Business Diversification

Obtaining registration will ensure that the business can expand its operations. It also gives businesses an opportunity to operate imports and exports from the country without any legal sanctions or penalties.    

2- Government Benefits

The registration makes the businesses avail themselves of government benefits like access to grants and subsidies, newly implemented policies, tax exemptions, etc. It also gets compliance benefits and no sanctions and fines by the government for business operations.

3- No Returns Filings

The applicant does not have to annually file returns just to prove that the business is running through legitimate ways and all the compliances are being met.

4- One-time Registration

The IEC registration does not require renewal after a specific period, as it has lifetime validity. Businesses dealing in the import and export of goods or services just need to obtain a license to commence their activities.   

5- Market Reputation

Entities having the registration have a considerably bigger market reputation than their competitors, which affects their customer base and increased business activities. Business operations relating to imports and exports will meet the DGFT requirements, making them certified by the government.

6- Easy Processing

The entire registration process can be done seamlessly through online mode. It takes very less time to receive the certificate of registration rather than going through the complex procedure of offline application.

Types of Business Requiring Import Export Code

 Certain types of businesses mandatorily require import export codes for importing-exporting goods and services. These are as follows –

• Sole Proprietorship
• Partnership Firm
• Limited Liability Partnership Firm
• Hindu Undivided Family
• Private Limited Company
• A Society
• A Trust

Exemption of Import and Export Code

The applicant must firstly look at the exemptions that are there before applying for the registration certificate. These exemptions are as follows:

• Any business involved in export and import for personal reasons, which does not include any commercial usage, agricultural or manufacturing
• Individuals or businesses involved in the import or export of goods from/to Nepal and Myanmar with just one consignment should not exceed the value of Rs. 25000 through China (through Nathula ports, Gunji Namgaya Shipkila) and Indo-Myanmar border areas.
• As per appendix -3, schedule 2 of ITC, any kind of failure to obtain the IEC code will not be applicable to the export of any material, natural organisms, special chemicals, equipment and technologies (SCOMET)

Requirements for Applying for IEC Registration

There are certain requirements that the applicant must follow to apply for IEC registration. These are as follows - 

• Getting a valid PAN card from the Income Tax Department of India is Compulsory.
• To obtain an IEC in the name of an applicant, one must have a bank account in the name of the applicant.
• To apply for the IEC code, one business must be registered under the Registrar of Companies (ROC)
• The relevant documents required for obtaining IEC are Identity proof, address proof, and business details. These documents must be submitted to the DGFT office.

Eligibility to get IEC Registration

Import export code registration is a crucial requirement for businesses involved in trading globally. Given below are the eligibility criteria for importers, exporters, and proprietors to obtain IEC registration-

1- Importers

• One should register for the Importer Exporter Code (IEC) to import any goods to India.
• IEC should be mentioned during customs clearance
• For international money transfers, the IEC Code is demanded by banks.

2- Exporters

• Exporters should register for IEC to export goods from India.
• For shipments, IEC codes must be quoted.
• For receiving foreign money, banks require IE Code.

3- Proprietors

• Individual business owners can obtain IE Code in their name.
• Forming a company is not compulsory to get an IE Code.

Documents Required for IEC Registration

The documents required for IEC Registration based on the type of business are as follows –

1- A Partnership Firm

• A copy of the Partnership Deed
• Applicant’s Digital Photographs (9)
• PAN Card
• Personal Identification (A copy of passport, Voter ID, Driving License, Aadhar card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, utility bills, etc)
• Bank Certificate in ANF 2A Form

2- Sole Proprietorship

• Applicant’s Digital Photographs
• PAN Card
• Personal Identification (A copy of passport, Voter ID, Driving License, Aadhar card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, utility bills, etc)

3- Private Company & LLPs

• Applicant’s Digital Photographs (9)
• PAN Card
• Partnership Deed for LLP & MoA and AoA for a private limited company
• Personal Identification (A copy of passport, Voter ID, Driving License, Aadhar card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, utility bills, etc)
• Bank Certificate in ANF 2A Form

4- Hindu Undivided Family

• Applicant’s Digital Photographs (9)
• Karta’s PAN Card
• Personal Identification (A copy of passport, Voter ID, Driving License, Aadhar card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, utility bills, etc)
• Bank Certificate in ANF 2A Form

5- A Trust

• Trusts Registration Certificate
• Trust Deed Copy
• Applicant’s Digital Photographs (9)
• PAN Card
• Personal Identification (A copy of passport, Voter ID, Driving License, Aadhar card)
• Proof of Official Address (Rent/Lease Agreement, Sale Deed, utility bills, etc)
• Bank Certificate in ANF 2A Form

Procedure for Obtaining Import Export Code License

Obtaining an import export code license is possible by online and offline mode. The process for applying for an IEC license is showcased in a step-by-step manner-

1- Preparation for Application

The IEC code application process is conducted online on the DGFT website. Applicants start by visiting the website, clicking on IEC profile management under the services tab, and obtaining a unique ID and password for correspondence. Personal and business information, along with a registered email ID, must be provided.

2- Processing the Application

After preparing the online application, the applicant must verify that all information meets the requirements and confirm its accuracy. Then, the form can be submitted online using either the Aadhaar OTP or the Digital Signature Certificate method. Under the Digital Signature Certificate method, there are two types of tokens available: Class 2 and Class 3 for entities.

3- Payment of IEC Fees

After completing the IEC process, the applicant must pay Rs. 500 through the portal. Once the payment is made, the applicant will be redirected to the BharatKosh portal.

4- Issuing Code

The applicant can track the application status online and usually receive the IEC certificate after a few days.

GST under the Import Export Code

According to the Goods and Services Tax Act of 2017, an indirect tax is levied on imported goods, including interstate trade. Providing a GSTIN number for each transaction is required. Additionally, the Permanent Account Number (PAN) is used for the Import Export Code (IEC) number. Government institutions involved in import and export processes do not need an Import Export Code.

Validity of IEC Registration Certificate

The IEC registration does not require renewal after a specific period, as it has lifetime validity. Once obtained, there is no need to renew the registration to carry out import-export activities. Businesses dealing in the import and export of goods or services just need to obtain a license to commence their activities.   

Import Export Code Registration Fees

The government fee for import export code registration is Rs 500. The professional fees start from Rs 799 and extend up to Rs 1599 and more in some cases.

Timeline for IEC Registration

If all the necessary documents are in place and the application procedure goes well, obtaining an IEC (Import Export Code) certificate just takes 10 – 15 days. The IEC registration period includes the application submission, the verification done by the Directorate General of Foreign Trade's (DGFT) document, and issuing the IEC certificate upon approval.

The precise time can vary depending on several factors, including the application's completeness and the DGFT's processing efficiency.

Why Corpbiz?

There are many benefits to partnering with Corpbiz for IEC registration, which improve user experience and expedite the overall process. Because of our team's expertise in the nuances of IEC registration, applications are handled accurately and quickly. Our experts save time and effort by streamlining the potentially complicated documentation and processes involved in submitting applications.

We prioritize speedy processing, ensuring that your IEC registration is completed as soon as possible to enable the quick start of import and export operations. Corpbiz ensures regulatory compliance and offers complete customer assistance with customised guidance aimed at meeting particular business objectives, making the IEC registration procedure simple and hassle-free.