What is IEC Registration
In the present era of ever-growing competition, businesses, in order to survive their substitutes available in the domestic market, are stepping out of their local presence. With back to back innovations and the generation of new ideas in business, the emergence of e-commerce, business operating in local limits finds it important to operate globally by stepping abroad.
There are several methods to go beyond the domestic level, such as amalgamation for foreign brands, opening franchisee abroad, starting subsidiary or branch office abroad, or through import-export business. Doing business at the global level is not that easy as it sounds.
Several procedures and laws shall be followed before going global, Import-Export Code license being one of such prerequisites for the businesses looking forward to kicking start their Import-Export business in India that is explained here.
Benefits of IEC Registration in India
IEC code is also known as Import-Export code issued by DGFT, which is one of the mandatory requirements for doing the business of import and export in India. A benefit of getting this license is the license holder gets the advantages of new business opportunities along with exposure in the international market. Also, a business can go online by enrolling themselves in international commercial centres such as Amazon Inc, eBay Inc, Alibaba.com, etc. Following other benefits of getting IEC registration are:
- With IEC code entrepreneur can distribute their products and services abroad with an ease
- Businesses can go global and expand the business through diversification or in other new ways.
- IEC license holders get the various advantages for their exports through DGFT export promotion scheme, export promotion council, etc
- IEC code is once for all. Therefore there is no need for any further return filing or any other compliance after obtaining IEC license.
- IEC code is valid for the lifetime with no requirement of renewal making it a one-time investment
- After approval of DGFT, the IEC code is allotted in just ten days. Furthermore, no additional proof is required thereafter.
Features of IEC Registration in India
Other elements of the Import Export code are as follows:
Through the IEC business is expanded and developed by going global for selling products and services outside India that overall develop and expand the business.
Benefits of Government's Schemes
The Government of India promotes the entrepreneur for exporting the products out of India and thus with IEC code exporters can easily claim advantages from customs, DGFT export promotion schemes, export promotion council, etc.
Based on IEC Code business engaged in import and export activities, can take the advantages of fare subsidies provided by the Government
IEC code allotted is for the entire life of the business; therefore, as long as the entrepreneur's business is running, there is no renewal requirement for such license. Therefore once obtained the IEC code can be used for every department and transaction undertaken by the business.
There is no requirement of subsequent documentation of any return. There is no compliance to be followed for keeping the IEC License legitimate and therefore, it is just a one-time expense with no further filling.
The requirement of Import Export Code Registration
Import Export Code Registration is required to be obtained by anyone willing to start an import/export business in India. IEC is a 10-digit code issued by the Directorate General of Foreign Trade (DGFT) online. Merchants cannot import without holding valid IEC code nor can exporters claim benefits availed under export schemes without such code. Following are the situations where IEC is required:
- IEC code is demanded by custom authorities in case the importer clears his shipment from the customs.
- IEC code is required when the importer makes the payment abroad through his bank, and such bank demands IEC code from such importer
- IEC code is needed by the customs port when the exporter sends his shipments.
- IEC code is needed in case the foreign payment is received by an exporter directly into his account for the export made.
- For availing various advantages from DGFT, customs, export promotion council, and such other statutory body.
Online IEC Registration Procedure
Before applying for Import Export Code Registration, check whether you are eligible for obtaining IEC code or no such requirement. In case of eligible entity following is the procedure to apply for IEC registration online:
- Complete and fill the Form 2A as per the prescribed “Aayaat Niryaat format.
- File the completed form online to DGFT
- Attach the following necessary documents with the form:
• PAN card of an applicant
• Copy of any one of the following Ids issued by Government such as Driving License/Aadhar/Voter Id
• Certificate of Incorporation in case of a company
• Partnership deed in case an applicant is a partnership firm
• Details of personal account or company’s current account
• Copy of cancelled cheque
• Address proof of the place where the registered office is situated such as electricity bill/rent agreement/registry etc.
- Once the form is completed along with all the attachments, the applicant needs to attach his DSC to such form and file an application online to DGFT along with paying the prescribed fee online.
- Authority after the verification of the application shall allocate the IEC code on the Email Id of an applicant mentioned on such application.
Frequently Asked Questions
IEC code can be surrender by intimating the intention to the authority who earlier issued the license. Upon the receipt of an application for license surrender, issuing authority shall cancel the same after noting the reason thereof. Thereafter, DGFT is notified about the same who in return transmit it to custom, RBI or any such other authorities intimating about IEC becomes inoperative.
Following is the exception for IEC registration:
- IEC is not an obligation for the traders registered under Goods & Service Tax (GST)
- If there is export or import of any product merely for personal consumption and not for commercial purpose, there will be no need to obtain IEC code
- There is no requirement to obtain IEC code in case the import or export is done on behalf of the Government of India by any department, ministry, or notified charitable institute.
Import-Export code is not a tax registration; however, depending upon the product, the certain custom duty can be imposed.
No, any individual, company or sole proprietor engaged in the business of import-export needs to obtain an IEC license. It is the necessary recognition provided by the GovernmentGovernment to exporters and importer of goods or services. However, if the value of the good transacted is too low, the authority may permit first export after imposing nominal charges.
All who wishes to obtain IEC can apply for it by submitting an application at Joint Director General of Foreign Trade
You can modify your application numerous times before it is submitted to the next department.
With the help of IEC Registration, you can obtain various benefits from the DGFT, Customs, export promotion council, etc.
Yes, it is mandatory to provide PAN Card. You need to furnish the self-attested copy of your PAN Card along with the application.
No, the IEC is delivered only to the address mentioned in the application.
You would need to provide proof of address copy of ownership title, registered copy of lease deed, copy of telephone bill, electricity bill, registered copy of rent deed, etc. need to be provided to prove the genuineness of your firm.
You need to provide a copy of both sides of your PAN Card to identify the issuing authority’s address.
No, the validity of IEC Registration is of a lifetime. Therefore there is no requirement to revalidate it.
Cancellation of the allotted IEC can be made by surrendering the same.
No, Import Export Code is a permanent document and is not item based.
You need to check the status of your BIN or Business Identification Number on the official site.