In mid-2020, the Directorate General of Foreign Trade launched the new platform that facilitates services regarding the Import Export Code. The initial phase of the platform came with the services like modification/amendment of Import-Export code and virtual assistant.
If you are running a business of export or import in Indian, then you must be familiar with the Import Export Code. The import-export code (IEC) denotes a 10 digit alpha-numeric code, which is granted by DGFT India. You can reach out to the DGFT portal to make an online IEC application.
Documents that you need To Arrange for IEC Application
The section below illustrates the list of paperwork that you must arrange for the IEC application.
- Permanent Account Number, aka PAN.
- 3 digital photographs of the owner.
- Bank details of, Driving License, Passport, UID, & Voter ID.
- Copy of sale deed or rent deed based on the nature of ownership of the establishment or principal place of business.
- Cancelled Cheque or Bank Certificate as prescribed in the form ANF 2A.
- Copy of LLP agreement in case of Limited Liability Partnership.
- Registration certification of the trust if an applicant is a core member of the trust.
What Purpose Does IEC Registration Serve?
The IEC certification, in a nutshell, offers innumerable to its owner. The section below will provide some brief on the number of benefits provided by the IEC code.
Ensure Business Expansion
With Import Export Code at the disposal, businesses have access to a wider market landscape globally, which technically helps them expand their business.
Provide Access to Government-Based Schemes
The IEC holders hold the exclusive right to benefit from customs, Export Promotion Council, and DGFT.
No Possibility of Filing a Return
Import Export code doesn’t attract any requirement related to return filing. Even for the exportation of commodities, one can skip such a requirement with DGFT. That means the IEC holder does not have to confront unnecessary paperwork and could be able to channelize their focus on core competencies.
Faster and Seamless Processing
With the advent of an online platform, the IEC certification’s registration process has been simplified and become user-friendly. Unlike previous days, the applicant does not have to wait long to avail of an IEC code from the authority.
Provides Much-Needed Credibility
Credibility is something that you can’t earn overnight. Your business has to sustain longer to reap such benefits. Fortunately, the IEC code is very capable of rendering credibility to the business. The IEC holders can expect its firm to grow at a considerable pace.
No Prerequisite for Renewal
According to the Foreign Trade Policy, the Import Export Code provides seamless validity to its owner by mitigating the provision of renewal. That means it will stay functional as long as business stay in the run or opt to cancel it for may reason.
Importance of Proper Documentation
Henceforth, it would help if you mitigated every incongruities with the paperwork related to the IEC application. Correct paperwork/documentation can help you obtain the Import Export Code with ease. At times, the authority cancels the request made against the registration by revoking the IEC application. The majorly happens when the authority pinpoints the following discrepancies in the IEC application.
- Wrong name
- Mismatch of the company name with the Permanent Account Number.
- Banks details found to be non-legitimate in nature.
- Changes made to the business structure aren’t reflecting in the application form.
The aforesaid discrepancies could lead to the revocation of the IEC application. Thus, one has to remain cautious while filling up the application form. Besides, the correct documentation also plays a vital role in the successful validation of the IEC application. If the applicant fails the serve the aforesaid requirement, the IEC application may stand canceled.
What if the Applicant Continues to Execute its Business Without IEC?
Firstly, you would dissolve the legal rights to perform activities regarding import and export in India. Secondly, it would also force you to confront the severe penalties prescribed under the EXIM policy. Thus, it is advisable to secure mandatory permission suggested by the Government of India and related authorities to perform import-export activities in India. Also, keep track of the changes that occur within your organization and update the same with authority.
DGFT has also incorporated a feature to counter such a situation. The IEC modification features on the DGFT website[1] allow the applicant to update their status with the authority against the changes made in the organization. For this, the applicant has to fill and submit a separate form along with the requested documentation. One can use the aforesaid information for the IEC application and reduce the chances of rejection.
Conclusion
Whether it’s a question of obtaining a new IEC registration or modifying the existing one, the applicant must remain watchful while addressing either of the processes. Not intimating the authority regarding the changes made to business structure could land you up in a stressful situation. So keep track of minute changes that may affect the IEC registration’s validity in one way or another. This way, you can avert any chances of rejection from the concerned authority.
At times, some of the applicants might find it hard to comply with the prerequisites of IEC modification or registration. If you are going through an identical situation, then feel free to avail professional-oriented advice from CorpBiz Experts.
Read our article: How to Establish a Profitable Chocolate Export Business in India?
