Are you planning to start your import and export business in an international level? Well, you must know that there are different standards and paperwork you need to comply with, for allowing your business to run seamlessly. So, if the business is regarding import and export then the primary aspect that is needed to meet is the IEC number or the Import Export Code. This is a unique 10 digit code issued by the DGFT or the Director-General of Foreign Trade. Predominantly the importers and exporters merchant cannot import or export goods or avail benefits from DGFT without the Import Export Code without obtaining the IEC. So, in this article we will let you know that can you really import without IEC number and under what conditions you can do so.
What Are the Reasons to Register under Import Export Code
There are reasons to register and receive an Import and Export Code as import without IEC is subject to certain conditions. A Partnership Firm involved in the business of import-export must register under IEC due to the following given below reasons:-
- IEC strengthens the Company and ensures the growth of an organization by complying it to enter in the international markets.
- Because of the IEC Number it can influence and benefit the business entity with many subsidies as provided by DGFT, Custom and Export Promotion Council.
- The IEC number Registration is a very easy and simplified process. The applicant gets the IEC Number within few days and so it is also time-efficient. Further, the advantage to get IEC number is that once it is obtained it shall hold an unlimited validity which acts like a bonus and does not require Code renewal.
- The IEC number gives legal protection for the Partnership Firm which enables in carrying import-export activities without much obstruction.
- There are no mandatory filings or post-compliances to the DGFT Department in case of IEC Registration. It is a very much simplified process.
Read our article:Can One IEC Code be Used for Two Businesses?
When can you Import Without IEC Number?
Although IEC is mandatory before dealing with import and export business but there are certain conditions when no IEC numbers shall be required for Import and Export. According to the circular issued by the Government of India[1], IEC is not compulsory for the companies that are registered under GST.
Consequently, the importer or exporters will not be required to apply for separate IEC number for importing and exporting in India. As per the DGFT, the PAN shall be considered as the new IEC number for the intention of importing, exporting and the DGFT department. As per the Government of India, there are two kinds of categories to deal with who can import without IEC:-
Let us know about it one by one:-
IEC for Person Registered under GST
According to the Government of India, if the business enterprise is registered for GST, then the GSTIN number obtained may be used for the purpose of import and export in India. Nonetheless, to continue maintaining the consistency, the DGFT department has agreed that the PAN number must be used as an IEC number and not the GSTIN number.
Furthermore, the application shall be sent to DGFT department for the new applicants and then the DGFT department shall issue the IEC number which will be same as the PAN number only. Therefore, the DGFT department is making requisite changes to the system for the existing IEC holder, in order that the PAN number shall be accepted as the IEC number.
IEC for Person Not Registered under GST
For persons who are not registered under GST, in that case the PAN number shall act as the IEC number. Furthermore, for all the new applicants for those not obligatory to register under GST, in such a case there shall be an application made to DGFT and then the applicant’s PAN shall be authorized as the IEC.
Further Exempted Categories to Import Without IEC
Besides the above given category, there are further exempted categories which satisfies the criteria of import without IEC. Below given are the details about the exempted categories to obtain Import Export Code number and to export and import without IEC.
As per the Foreign Trade Policy of India, IEC is obligatory for import and or exports. Nonetheless, these following categories of the importers or exporters are exempted from obtaining the IEC.
- Importers covered under clause 3(1) (except sub clauses (e) and (l)) and exporters that are covered under clause 3(2) (except sub clauses (i) and (k)) of Foreign Trade (Exemption from application of Rules in certain cases) Order, 1993.
- Ministries and the Departments of Central Government or State Government and Notified Charitable Institutions can import without IEC.
- Persons who are importing or exporting goods for their personal use that is not connected with the trading or manufacturing, commercial use or agriculture.
- Persons who are involved in importing or exporting goods from or towards Nepal, Myanmar through the border areas of Indo-Myanmar and China (through Namgaya Shipkila, Gunji, and Nathula ports), provided a single consignment’s CIF value does not go beyond Indian Rs.25,000 and in case of Nathula port, the pertinent ceiling value will be Rs. 1,00,000/-
Further, import without IEC shall not apply for exporting of (SCOMET) as listed in Appendix – 3, Schedule 2 of ITC (HS) except in the case of exports by category (ii) given below:
- Special Chemicals,
- Organisms,
- Materials,
- Equipments and
- Technologies
Conclusion
IEC number is very important for the business dealers managing with the import and export of the business globally. Without obtaining IEC number, they will not be able to continue with the business and will have to face unnecessary consequences.
Hence, the above given exceptions to import without IEC is subject to certain conditions which the business dealers must go through properly before starting to import without IEC.
Read our article:What is the Format of IEC Application?
