In the past few years or so, our country has seen a steep growth in it its Small and Medium Enterprises (SMEs) sector. This success was credited to relaxed FTP norms, availability of several government schemes, and simplified EXIM regulations. There are certain legal requirements under the FTP for starting an EXIM venture in India. Obtaining an Import-export code is one such requirement. In this write-up, we shall dig down some facts about the export of services and IEC code.
What do you mean by IEC registration?
The IEC registration serves as an authentication code that helps the authority validate the specific importer or exporter. Presently, it is accorded by the Director-General of Foreign Trade (aka DGFT) with lifetime validity. For the time being, nobody is allowed, except the government department and notified NGOs, to engage with EXIM related activities without this very code.
What is the meaning of Service Exports?
Exporting of Services refers to services rendered overseas,, i.e. outside India. The reimbursement of such services is received in exchangeable overseas currency. In laymen’s terms, service export is referred to a service provided by an individual of one nation to a different nation, its residents, firms, etc.
Is it mandatory to secure IEC for the export of services?
No. however, there is a condition. In the case of export or import of technology or services, the IEC is required only when the supplier of the services benefits under the FTP or deals with specified services as cited in Section 7 of Foreign Trade (Development & Regulation) Amendment Act, 2010.
What do you mean by “Specified Services”?
“Specified services” refers to services that are banned because of the national security of the country. Therefore, if you are involved with any specified service under FTP, you only need the IEC code; otherwise, it is not compulsory. Dealing consulting or software services need not seek IEC code.
How to apply and secure IEC Code?
You are required to follow the given step to secure the IEC code:
- You must file an application (Aayaat Niryaat Form 2A ) with the respective DGFT.
- Along with the application, you will be required to upload all fundamental documents such as Passport/Pan card/Aadhaar etc., address proof like Aadhaar Card\Voter ID\Passport, and bank details.
- Use the Digital Signature Certificate to validate the application and document during application submission.
- Submit the applicable fees
- As soon as the application is approved, the authority shall deliver the soft copy of the IEC code.
Common queries around Import-Export code
What is the use of IEC code?
IEC code is a legal permit for conducting EXIM activities in India. It is applicable to individuals and businesses who intend to do such a business.
Does personal export or import require an IEC code?
An IEC Code is not mandatory to import or export of goods utilized for personal use.
Who doesn’t require IEC despite their engagement with EXIM acitivities?
- government ministries and departments
- notified charitable organizations
Who is eligible to apply for the IEC code?
Any person or company intending to start export import activities can apply for this code.
What is the common documentation required for IEC code?
Common documents required for the IEC code include:
- Business address proof.
- Business registration copya .
- Self-attested copy of the applicant’s PAN Card.
- A letter of authority issued by the designated bank.
What is the application processing time for an IEC code?
The application processing time varies somewhere between 3-and 7 days.
Is it possible to start an EXIM business without an IEC code?
No. IEC Code serves as a fundamental legal document for engaging with import-export business.
Do IEC Code adequate to address entire shipment legalities?
No. You will be required to present documents like bill of lading, bill of origin, packing list and so forth, apart from IEC, before the customs during shipment transit.
Export of Services is a vague subject matter for most business owners in India. To understand it explicitly, one has to crosscheck the legal implications under the foreign trade policy.
Read our Article:IEC Registration Renewal and Surrender: Underlying Norms