Import-Export Code (IEC) is a 10 digit code that allows the exporters to transport their goods to overseas locations. It essentially helps in clearing the legal complications during the inspection of the shipment by the customs and regulatory authorities. Directorate General of Foreign Trade (aka DGFT) is the authority that is responsible for issuing the IEC code to the exporter and the importer.
Please note that not all products can be shipped to a foreign country. There are certain provision has been underpinned by the DGFT in association with Foreign Trade Policy (FTP) related to exportable goods. So, make sure to go through the list of exempted and non-exempted export goods before sending the quotation to your overseas client. In this write-up, we will shed some light on relevance of the IEC for oil export business.
Overview of Oil Export in India
According to the Directorate General of Commercial Intelligence and Statistics (DGCIS), India is one the leading exporter of crude oils, essential oils, celery seed oils, and cumin oil to the United States, United Kingdom, and some gulf countries as well. For more than two decades, the export of essential oils in India has remained consistent with an average figure of 682.59 USD Million.
In 2018-19, India export approx. 8.96 MT of petroleum products to Asian countries in the first 10 months as compared to 10.6 MT exported in 2017. During the said period, petroleum products exported to gulf countries increased to 8.18 MT from 6.72 MT while exports to European countries rose to 5.68 MT from 3.03 MT.
Why Oil Export Business Adheres So Much Potential?
Why you Need an IEC for Oil Export Business?
Every facility working in a field of the export or cross-border business must have an IEC code. This code not only legalize the process of shipping goods outside the nation but also helps in tackling legal prerequisite associated with this form of business.
Feasible Benefits that IEC Code offers to the Oil exporter
- IEC code mitigates the threat of fraudulent transportation/shipment.
- The exporter with an IEC code can enjoy reduced shipment time.
- IEC code enables the trader to mitigate legal obstacles while fetching a payment from the importer.
- IEC code legally authenticates the shipment process from the ground up.
What Documents are required apart from the IEC for oil export?
- Shipping Bill / Bill of Export.
- Customs Declaration Form.
- Dispatch Note.
- Commercial invoice.
- Consular Invoice.
- Customs Invoice.
- Legalized / Visaed Invoice.
How to get an IEC code to start an Oil Export business?
On 13th July 2020, the Directorate General of Foreign Trade (DGFT) announced the launch of an online platform for applying for an IEC license. Requirements of the Digital Signature Certificate have also been announced by the DGFT to reinforce the procedure related to IEC issuance to avert fraudulent activities. The web-based method for IEC Registration is as follows:
Step 1: Visit the DGFT portal
First, reach out for the url- https://dgft.gov.in/CP/ , to get access to the DGFT portal.
Step 2: Select “Apply for IEC” option
On the right section of the home page, click on the “Apply for IEC” button to open the DGFT account creation form.
Step 3: Complete the login formalities or create a new account.
Upon clicking on the “Apply for IEC” button, you will visit a registration page where you need to incorporate the personal detail. In case if you have already registered to the portal, select the login tab on the top and enter your account detail.
Step 4: Complete Verification process post filling the Registration Form
Once you fill-up the requested detail, tap on the “Send OTP” to receive an OTP on your contact number and email id. After this, revert back to the home page of the portal and tap on the “Apply IEC” button to login into the portal.
Step 5: Post login, start filling up the form
As soon as you hit the login button, the portal will provide you access to a web-based form for making an IEC code application. Make sure to go through the form in detail rather than filling it up in a hurry.
Step 6: Incorporate the Bank Information
While filling up the form, you would come across a section to fill in the bank detail. Make sure to provide legitimate detail in this regard and also upload the scan copy of the canceled cheque. Once done, tap on the “Save and Next” button.
Step 7: Opt for the Acceptance of Undertaking/Declaration
Acceptance of Undertaking/Declaration is an option that you would find in the last section of the application form. You were required to select the option and then hit the Acceptance of Undertaking/Declaration to proceed further in the process.
Step 8: Select the mode of Application Submission
In this stage, you can either select Aadhar OTP or DSC (Digital Signature Certificate) as a mode of application submission.
Step 9: Completes the Payment Requirement
Submit the application fee Rs. 500/- after submitting the form on the portal. After confirming the payment, the portal will land you on the DGFT website where you can download a hard copy of the IEC license under “Managing IEC” Option.
This is the complete process for availing IEC for oil export business. Trading of oil to the overseas location seeks a requirement of IEC code and it is mandatory for the individuals interested in setting up an export business. IEC code usually finds its way in shipping documents like Performa Invoice, Commercial invoice, Packing list, Certificate of Origin, and Bill of lading.
Read our article: How the IEC for Startup could be Beneficial in India?