Authorised Dealer Code is a 14-digit numerical code given to an export business that has a current account with a bank. An AD Code must be registered at each port where customs clear the exporter’s goods. The AD Code for export for a specific port is necessary for customs clearance and must be provided to the Customs House Agent (CHA).
Overview
Today, business owners want to expand their enterprise by entering the global market. Export promotion is unquestionably a vital goal of every government because it indicates the growth of the country’s economy.
To enter the world of Exim trade, the exporter must complete specific requirements for legal compliance and essential documentation. Import-export code is an essential requirement for an EXIM trade. It is required by both the importers and exporters of goods. In addition to the Import Export Code, other documents are also essential to perform EXIM trade-
- Bill of Lading or Airway Bill
- Shipping Bill or Bill of Export
- Technical Standard Certificate
- Foreign Exchange Control Form (SDF)
- AD Code
- Commercial Invoice
- Terminal Handling Receipt
The DGFT-approved format for an AD code is printed on a document with the bank’s letterhead. A bank can only give an AD Code that deals in foreign currency or are an authorised dealer in that currency. This is consistent with an AD Code’s objective to guarantee that foreign currency transactions in an exporter’s current account result from legal trade.
The port or airport from which exporters plan to ship their goods overseas must have their AD Code on file. The AD Code must be registered for the facility and the port connected to it if the shipment is sent from an inland container depot (ICD).
Registration for an AD Code is valid for life. The AD Code for each port, whether in the same state or different states, must be registered by the exporter if they ship from more than one port. The AD Code for each port will differ in such a case.
Importance of AD Code
At each port where the exporter intends to export their shipment, they must register the AD Code. The following is a list of the importance of AD code for export:
- A shipping bill is a mandatory document for export customs clearance.
- An AD Code registration with customs ensures that any government benefits the exporter utilises – duty rebates and exemptions, GST (Goods and Services Tax)[1] refunds, etc. – are credited directly to the exporter’s current account. Without an AD Code registration, a business cannot generate a Shipping Bill, Indian Customs’ electronic data interchange platform.
Documents Required to Obtain AD Code for export
The applicant must register the AD Code with customs after receiving it from the bank. The applicant must visit the custom house agent for this. For AD Code for Export, the Custom House Agents can offer transactional services.
To obtain an AD code for export, the following documents are necessary:
- Bank’s letter of authorisation for the AD Code
- GST registration number
- Three years of the company IT returns
- One year of the company’s bank statements
- PAN number
- Import-Export Code
- Company’s Board Resolution
- PAN Number, Aadhar Card, Voter ID, and Passport copy of the Director or Proprietor
- Export House Certificate (if any)
- Manufacturing License (If any)
After the documents are submitted, the shipment is then prepared for clearance. Additionally, the dealer is informed of the acceptance of the AD code when EDI creates a shipping bill during export filing.
Registration Process for AD Code for Export
Following are the steps to register for an AD Code for export:
1. The applicant must first apply for an AD code for export at a bank that interacts with foreign currencies and serves as an authorised dealer for forex banking.
2. The bank will proceed with the application and grant the applicant an AD Code.
3. The applicant must go to the Custom House Agent to register the AD Code after receiving it.
4. After the AD Code is registered, the exporter’s complete profile, including his shipping information, will be visible on the ICEGATE website.
Changes in existing AD Code
The Indian Custom electronic gateway makes it possible to amend or modify an existing AD code in addition to adding new AD codes.
The following factors may make the modification necessary:
- The exporter’s bank account has been changed.
- The exporter no longer exports goods; it changes to the port, airport, or shipment.
An exporter’s letter explaining why there is a need to modify the AD Code or cancel a previously registered one must be submitted with a modification request, along with:
- The relevant bank branch’s email address for verification
- All other paperwork necessary to register an AD Code.
The procedure to modify an AD Code is as follows-
1. On the Authorized Dealer Code Registration dashboard, click Modify Account after choosing the appropriate location.
2. Choose the bank name from the drop-down menu on the Modify Account page that appears, type the correct AD Code, IRN, and IceGate ID and then click Save Changes.
3. A six-digit OTP is sent to the email address or mobile number if the inputs are accurate. The modification request has been submitted after the OTP has been validated. On the dashboard, the applicant can see how the request is progressing.
Conclusion
The exporter needs an authorised dealer code. It is crucial for more than just receiving shipping bills. The exporter may apply for government benefits directly to his current account, including the refund of GTS, duty drawback, rebates, and refunds of import duties. It aids the government in monitoring the sources of foreign currency.
Read our Article:Benefits of Obtaining AD Code Certificate in India
