IEC Code is a unique ten digits number issued by the DGFT – Directorate General of Foreign Trade, which is a Ministry of Commerce and Government of India to the Indian Companies. There are several procedures and laws which should be followed before starting up with businesses globally, and IEC (Import Export Code) is one such prerequisite which is to be mandatorily followed and obtain its registration and license. IEC (Import Export Code) license is mandatorily required for the business enterprises involved in importing or exporting from India. IEC is also known as Importer- Exporter Code. In this article we shall give answer to the question that most importers and exporters are curious to know that whether one IEC Code be used for two businesses or separate IEC Code will be required for each business. Continue reading to know more.
What is the Benefit of Obtaining One IEC Registration?
Few of the benefits on registering with IEC are given below:-
Expansion of Business
Just because IEC is required for taking services or product to the global market, hence, IEC registration can be a major factor behind the growth of businesses.
Availing Several Benefits
IEC registration provides several benefits to the Companies in their imports and exports process. As the Export Promotion Council, DGFT, Customs, etc., comes with different schemes beneficial for these dealers in exporting and importing goods but for that compliance with IEC registration should be must.
No Filling of Returns
After allotment of IEC, it is not required to comply with any process for maintaining its validity. Hence, it is not mandatory in the IEC to file any returns. There is no requirement for filing any returns with DGFT even for the transactions of export.
Obtaining one IEC code from the DGFT is an easy process and it can be recieved within a time period of 10-15 days after submission of the application and there is no need to give proof regarding any import or export for obtaining IEC code.
No Need for Renewal
IEC code has a lifetime effective validity and does not require any renewal. Once it is recieved, it can be used by any business entity for all the export and import transactions.
Read our article:Step by Step Guide to Raise IEC Certification for a Partnership Firm
Can we Use One IEC for Two Businesses?
If a business dealer is planning to register its company with the DGFT for dealing with import and export then registration for one IEC code is a pre-requisite necessary condition. But there are many businesses dealing with the import and export who keeps on enquiring if every business firm needs to apply for separate IEC.
While applying for obtaining registration under IEC, the IEC is linked with the user’s PAN card. Hence, there is no need for separate IEC registration in case any person is starting up with more than one proprietorship firm. If the person has already registered its business under one IEC code and it is linked with his PAN card then if he further plans to start with a second business, in such a case he can continue with his already existing one IEC code which he previously obtained.
If the person has obtained more than one IEC under one PAN for his different businesses then he will have to apply for cancellation of the same. Only one IEC code can be issued against a single PAN and multiple IECs issued against a single PAN shall be suo-moto deactivated.
Accordingly, all the importers and exporters with multiple IECs against a single PAN can choose to retain any one IEC code and is obligated to surrender all other IECs to the concerned authorities for cancellation.
What is the Requirement of IEC code?
IEC is required for various purposes, the given below are some major purposes for its requirement:
Steps for Obtaining IEC Registration
The following steps should be mandatorily complied with for obtaining IEC code registration:-
Step 1: Application Form
First, for an online application an application form shall be prepared in the prescribed format – Aayaat Niryaat Form ANF-2A format and it should be filed with the concerned Regional office of DGFT.
Step 2: Prepare Documents
Secondly, prepare the necessary documents for obtaining the IEC registration and documents should be with reference to the person’s identity, address proof, legal entity, contact details and with bank details & the certificate in respect of ANF2A.
Step 3: Filing Application
Once the filling up of application is completed, it is required to be filed with DGFT through DSC (Digital Signature Certificate) and then the payment of the required fee for the IEC Registration shall be submitted.
Step 4: IEC Code
Finally, after the approval of the application then the IEC Code shall be received in a soft copy from the government.
Documents Required for IEC Registration
The documents required for IEC registration if you are planning to start with import and export business are given below:
- The user applying shall be required to submit his own or the company’s PAN card.
- Aadhaar card, Voter ID and or copy of passport will also be required.
- Cancelled cheque of current bank account must also be submitted
- Utility bill or the Rent agreement or of the company
Cases where Import Export Code (IEC) is not Mandatory
According to the circular as has been issued by the government, IEC is not obligatory for all the traders registered under GST. Thus, in such cases, the PAN of the trader will be considered as new IEC code for the intention of import and export.
Import and Export done for personal purposes and not used for any commercial purpose does not require Code (IEC). Import and export done by the Departments under Government of India and Ministries, Notified Charitable institutions is not required to obtain the Import Export Code.
IEC is a bouquet of benefits to its holders. As, export plays significant role in the growth and development of the economy of our nation, this is the reason behind government of India constantly providing with different benefits with the purpose to promote more export from India.
Thus, for the promotion of export in business and to simplify the process of obtaining IEC registration the regulation of government provides only one IEC Code even for two businesses.
Read our article:How to obtain IEC Code in India